Small and medium-sized enterprises (SMEs) are the backbone of Singapore’s economy, contributing 47% of the country’s GDP and generating 62% of available jobs. According to official records, there are about 126,000 SMEs in Singapore and most of the owners are so preoccupied in their daily operations to think of anything else. Many of them face problems attracting suitable candidates to join them. They also have difficulty developing and retaining people. Even though Leadership is a critical and a pertinent issue in propelling the SMEs forward, there is little or no research being done to understand the challenges in this area. Hence, this research seeks to understand the readiness of the leaders in SMEs in meeting future challenges as well as to find out the current leadership development practices in the organization and identify the gaps in the process.
Through the research, it is found that up to 58.3% of the leaders are not ready to take on the challenges facing the organizations moving forward and frontline/operational leaders seem to be the least ready. The organizations need leaders who will lead by example through fulfilling their commitments, and leaders who are good in interpersonal skills and who can build the team. Managerial skills such as planning and decision making also seem to be lacking and the problem is compounded sometimes by the lack of leaders who are willing to step up to shoulder greater responsibilities.
Career and leadership development processes are generally ineffective and companies lose their leaders to better opportunities and salary elsewhere. Some leaders leave because they were not able to take the stress that comes with their responsibilities. The leaders who remain are mostly developed only through training and development programs, and retention strategies for these leaders appear to be less than holistic. All these lead to a low of just 20.8% of the companies agreeing that their next-in-line leaders are very ready to take over the current leadership
Although the challenge of building strong leaders in SMEs is great and the resources seem to be limited, there are still some ways of possibly increasing the readiness of leaders for the future through creating a structured leadership development process. The recommendations are found in the full report for anyone who is interested.