Managers of the Future Small Businesses - Essay Example

Introduction Future is considered as uncertain and to anticipate future challenges to be faced by the companies is even a bigger challenge. Over the period of time, management as a practice has evolved with many new practices have been introduced and companies continuously changing and evolving in order to make changes which can help them to deal with future in effective manner. Considering the future challenges, managers also have to make sure that they have the required talent and skills to deal with the future challenges. It is generally believed that managers who are reluctant to change, learn and adapt often find themselves at the difficult ends when future complexities arise. The competitive advantage which organizations strive to achieve may not be achieved or sustained if managers and leaders of the organization are not flexible enough to anticipate future changes. Private sector organizations are growing in complexity and with increasing competition; it has become relatively difficult for the organizations to actually face the future. In order to do so, organizations have to develop the skills of their people. What is critical to understand is the fact that organizations have to close the gap between the current skill set of their employees and the future skills required to perform their jobs. As such it becomes relatively critical for current organizations to develop people and soft skills which will be necessary for the managers of future. This paper will discuss and explore the question of managers of the future small businesses and the people and the soft skills they will require to successfully deal with the future challenges. Managers of the Future Organizations are considered as essential part of the society and the people working in such organizations are drawn from the same society and are affected by the way society is shaped. It is also critical to understand that to work effectively, it is important for firms to actually understand as to what are trends which may arise in future and need to be anticipated and learned. Since modern society moves very fast and new trends and images emerge almost every day, it becomes relatively critical for HR professionals to actually understand such trends and plan accordingly to find managers and leaders who can be equipped to deal with such changes.it is critical to note that industrial societies such as UK and rest of Europe and US are now in a post-industrialization era wherein the new challenges and trends are entirely different than that of the past. In advanced economies, workers with low level and low value skills may not be skilled enough to either work in modern organizations or even manage their own businesses. To achieve this objective, they need to develop new skills. (Chell, 2013) This clearly suggests that the shift will be towards knowledge intensive industries and services with only managers excelling at their jobs who possess soft as well as hard skills and also have the ability to adapt and improve their knowledge continuously. It is often a case that small business managers often lack the education and required training to deal effectively with issues such as marketing, financial accounting /management and related legal issues. This makes it relatively critical for the small business managers to develop their capabilities to actually learn new skills which can help them to better understand these issues first.  (Beckfield, 2007) Considering the overall complexity of the future, it may become increasingly difficult for small business owners and managers to anticipate the future changes and also develop such skills to effectively manage their businesses. Since small businesses form the major chunk of any society’s overall number of operating businesses, therefore managers or leaders managing such businesses have to evolve new thinking and new set of skills to deal with such challenges. Managers and Leaders Before discussing the hard and soft skills required by the managers to successfully deal with the future challenges, it is important to highlight the differences between a leader and a manager. One of the key differences between the managers and the leader is that managers have subordinates whereas leaders have followers. By motivating people to achieve the common goals, leaders attempt to create more value whereas managers often count value. A leader is charismatic and transformational in nature, who commands respect and attention of his followers however, a manager focus on achieving transactional level objectives only. (Nayar, 2013) Hard Vs Soft Skills Before discussing new emerging trends and what skills may be required by the managers to have them in their essential toolkit, it is important to first critically define the importance and differences between the soft and hard skills. Soft skills are often associated with a person’s emotional ability which comprises of different personal traits, social relationing, communication, personal habits as well as language. Soft skills therefore are required to develop an acceptable degree of forming social relationships and attitudes which can help managers to successfully deal with people by fulfilling their core and essential needs. Hard skills however, are the occupational skills which are required to fulfill the job requirements. Hard skills are the technical skills which are actually required to complete the core requirements of the business or the job. Some of the hard skills performed during the day to day routine of the managers including writing, business analysis, design and development etc. these skills are considered as necessary because they form the core of the job requirements and individual members must have the ability to perform them to the desired level.  (Hill and Jones, 2010) What is critical to note however, is the fact that soft skills are related with that of hard skills because hard skills need to be supported by the emotions, feelings, insights and what is called inner knowing of an individual? What is important therefore is the fact that future managers must be able to establish a link between the two and rightly exercise both these skills New Trends Emerging With more focus on the formation of new small businesses by young people, it is becoming clear that the young people working in small businesses will also require entrepreneurial skills. Though entrepreneurship is as old as the man is however, future trends indicate that young people managing working in smaller businesses may prefer to open their own businesses as compared to continue working for their employers. What is however, critical to understand that having a successful entrepreneurial career, it will require deeper understanding of how technology is going to shape the future of small businesses. With more focus on location based marketing, small businesses are in the limelight again because of their diverse presence across different regions. Demographics is another critical factor which is shaping the new trends in the developed world as mean age of people working is on the rise. Due to an ageing population, the overall workforce composition making it to lack the essential skills required for the future. Ageing population in the workforce makes it difficult for the employers to actually get young employees who possess the required level of skills which can meet the future skill requirements. These trends have been further aggravated by the labor force mobility. (Smentek, 2007) Education and Skills It has been observed that many new technologies are emerging over the period of time resulting into a clear shift in the work requirements. Technologies such as big data are going to disrupt the public as well as private sector besides affecting the small and large businesses. What is critical to note however, is the probability that the requirements of the skills may not match with that of the education of the employees. It may be possible that the low level skills may be offered to employees who are relatively over-qualified for the positions.  (Ryan, Silvanto and Brown, 2013) Future managers therefore may have to ensure that they develop the required career path for their employees who can help them to grow and achieve the desired career progression according to their education and skills. Matching employee skills with their education and designing the required career progression path may be a significant challenge for the Globalization and Labor Mobility Globalization has emerged as probably the strongest force in the recent past as it has made fundamental and structural changes in the way organizations do business. Small as well as large businesses are equally affected by globalization and therefore require to adapt to the new managerial, social, cultural and political changes brought by the globalization. It is however, also critical to understand that labor mobility has emerged as one of the key influences of the globalization. Due to improve communication networks, relatively relaxed immigration and labor rules as well as the ageing of population in developed countries, labor has become mobile. Managers and employees now have more opportunities across the globe and considering the improvements brought by globalization, the overall attrition rate increased also. Jobs have become relatively fluid in nature with employees coming in and out of a particular profession or working geographical location. (Hamel, 2013.) In UK, migrants comprise of significant portion of the total workforce employed in diverse range of industries including that of hospitality, social care, health, process operations etc. The overall number of migrant participation in UK’s economy is consistently on rise suggesting that globalization has actually allowed the migrants to play a significant role in the economy of the country. (Harvey, Allard and Harvey, 2002) Another related concept with the mobility is that of the employee turnover which can be affected by the way work practices are to be evolved over the period of time. Recently, due to more opportunities as well as new and improved work environment, employees tend to switch their jobs at the local as well as international level. Future managers therefore must have the skills to motivate their employees and help them retain within the organization. Talent acquisition, management as well as retention skills will be highly required even for managers of smaller organizations. Considering the high employee turnover and complex work requirements of the future, small firms will face difficult challenge to bring in policies and procedures which can help them to retain the desired talent within the organization. (Maes, 2013) Diversity & Globalization On one hand globalization has created workforce mobility and on the other hand, it has also resulted into workforce diversity. With more mobile workforce, it has become apparent that modern workforce will be a diverse workforce having multiple ethnic participation from international workforce. With increasing diversity, the overall perception of the leadership can also change and as such requires future managers to better understand as to what skills may be required to deal with employees from different faiths and cultural backgrounds. (Kapoor, 2011) Small businesses operating in global environment therefore also have to make sure that their managers must have the required training to deal with the diversity. Since immigrants often become part of the small organizations therefore managers of small businesses actually will require the skills to deal with the new cultural challenges and how to overcome any such behaviors and cultural hurdles. (Lauring and Selmer, 2013) A significant challenge which has been faced by the employers now is that of lack of training in managing the diversity within the organization. Future managers must therefore develop their interpersonal communication skills within the context of working in a diverse organization. Service Oriented Economy As highlighted above that developed economies have evolved over the period of time and now they are into post-industrial era. Post-industrial era requires knowledge intensive workers with more participation in the services sector. With shift in manufacturing activities to the developing countries such as China and India, developed economies are more of now service oriented in nature. Service oriented economies however, require a different set of skills as compared to the employees working in the manufacturing industry. Further, this shift towards the service oriented workforce resulted into an increased participation of females in the workforce. With greater equality for women being advocated, it is quite clear that females will be possessing significant chunk of the workforce. It is therefore quite critical for the future managers to improve their skills and abilities to learn how to work with their female counterparts. Legal complications arising from equal opportunity, sex discrimination as well as equal pay will be some of the key issues to be faced by the future managers in order to successfully manage future employees. (Dacko, 2006) Reducing gender gap in terms of pay as well as removing such gender discrepancies in the leadership positions for the women may be some of the key challenges to be faced by the managers in future to successfully deal with women. Collective Workplaces Industrial societies have traditionally remained manufacturing oriented in nature however, since 1970s there have been a gradual shift in these trends. Historically, unions acted as the collective bargaining agents for the employees however, this trend seem to be on decline with unions losing their power and grip over the organizations. However, due to lack of union activity at the organization wide level, it has become increasingly difficult for the employees to have their voice heard within the organization. Ensuring fairness and equality for employees in the absence of collective bargaining agents may be put managers at difficult path to devise new mechanisms and compensation structures which can overcome the differences in employee pays, ensure fair compensation and other benefits to the employees. Future people skills will be required more when managers will be facing the new challenge of ensuring fairness and equality within the organizations in the absence of collective bargaining agents. Meeting employee expectations as well as sustaining such expectations specially in small businesses can be a significant challenge due to lack of any formalized collective bargaining within small businesses. (Drucker, 2013) Conclusion Organizations are increasingly becoming complex and it has become more important for the managers to anticipate future challenges and update their skills and abilities to meet with future challenges. Some of the future trends are to be influenced by the forces of globalization whereas some of these will be general in nature. Since globalization is in effect since long therefore it seems that most of changes will be driven by the globalization as a force for social change. Probably the most important change will be the diversity of the workforce at both the small as well as large business level. Small organizations, like bigger organizations, will face the same consequences of having a diverse workforce with unique cultural as well as managerial challenges. Managers will have to equip themselves and train in order to make sure that they have the required talent to effectively manage diversity. (Agrawal, 2012) Higher level of education may also create situations where the overall skill level requirements of the jobs may be less than that of the employee education. In such situation, it may become challenging for the small organizations to actually attract, manage and retain the talent require for performing the complex future tasks. Managers of the future will therefore have to make sure that they design and develop such performance management and measurement practices which motivate talent to remain within the organization. Talent management, attraction and retention therefore will be some of the new skills required by the future managers. References Nayar, V. (2013). Three Differences Between Managers and Leaders. [online] Harvard Business Review. Available at: http://blogs.hbr.org/2013/08/tests-of-a-leadership-transiti/ [Accessed 31 Oct. 2014].  Agrawal, V. (2012). Managing the diversified team: challenges and strategies for improving performance. Team Performance Management, 18(7/8), pp.384--400. Beckfield, J. (2007). The globalization of nothing. International Sociology, 22(2), pp.169--172. Chell, E. (2013). 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