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1. Do you feel there are significant differences in the way HR is managed between mid-size and large enterprises globally? What are the challenges and benefits that mid-size enterprises usually face with regard to HR management?

Yes, the management of HR in mid-sized enterprises varies significantly from that in large companies. This is, partially, because of the different HR challenges these enterprises face, particularly in attracting and retaining good talent.

The mid-size companies cannot match large organisations in their brand strength and reach. They also cannot offer the high salaries that big brands can afford. Therefore, they have to think hard on the employer value proposition and come up with innovative ways to attract and retain talent. For example, instead of seeking talent from the top universities, they should broaden their search to include non-conventional sources.

On the other hand, these companies also have a lot going for them - flatter structures, a non-hierarchical environment, enriching and challenging jobs, faster and more interesting careers etc. At a time when people across the world are becoming increasingly concerned about the environment and being socially responsible, these enterprises can customise their HR and corporate policies to attract talented managers who may be dissatisfied with large companies and their "shareholder-value-at-any-cost" mindset.

2. Are there any specific distinctions with respect to Indian midsize enterprises that have struck you? How can they claim competitive advantage from these distinctions?

I have to say that I am pleasantly surprised by the awareness among managers in mid-sized enterprises of the need for good HR. Many of them have gone beyond thinking of HR as payroll administration and have taken steps to enhance their HR practices and policies. For example, simple grading systems, compensation and rewards structures, performance-linked pay are some practices that many mid-sized enterprises have put in place. Their challenge is to sustain these practices and build on them. In part, the challenge stems from their inability to get and retain sound HR leadership. They can overcome this challenge by retaining specialist firms to run their HR for them, fully or in part, until they are able to find good HR leaders. Mid-sized enterprises, like large ones, are in different stages of evolution. Those that are in the start-up phase can appeal to the entrepreneurial mindset to attract talent and design their pay and other HR policies to reinforce this proposition. Those that are in a more mature stage could pitch faster careers, broader job responsibilities and autonomy to attract the right talent.

3. In small and mid-size enterprises, the CEOs often take over the HR responsibilities. What are the advantages and disadvantages of this?

Understandably, small enterpreneurs are more concerned about costs and hence wish to focus on what they consider to be their core functions - sales, production, product development. It doesn't matter who controls HR as long as it is done right! If the CEO can do it right, hats off to her. But the CEO, busy as she is with a whole range of things to do, is unlikely to be able to devote the time required to do the HR functions well. My suggestion would be to start small, take one step at a time. For example, hiring one professional and asking her to put in place the basics is a good way to start. It is important to keep in mind while hiring an HR professional, that the person brings a keen understanding of an entrepreneurial environment: a tolerance for ambiguity and "messiness", speed, the ability and willingness to change course and be flexible etc.

4. A quick review of available data shows that a little more than 20% of the BSE-30 companies actually placed their HR heads on the board of directors. If large market-cap enterprises don’t appear to give the HR function a seat on the board, why should small and mid-size enterprises pay attention to HR, as a function or as a system?

A Board seat depends on a number of factors and I wouldn't lose sleep over it. The HR function has achieved a level of importance that no one had dreamt in decades. It is wrong to conclude that the function is not of prime importance, simply because it is not represented on the Board. I know that a number of Boards do discuss talent and HR issues seriously even if the HR function is not represented. Given the talent deficits that we have and will continue to have for some time to come, I am confident that HR will assume even greater importance in the years to come.