The contribution of HRM and L&D in different types of organization 107 The contribution of HRM in SMEs Small and medium-sized enterprises are defined in terms of the number of employees ­ up to 250. SMEs play an important part in the economy ­ they account for 59 per cent of private sector employment in the UK (Storey et al, 2010: 306). In the private sector they are usually founded by entrepreneurs and often remain family owned as they grow. They may be more proactive and innovative than larger firms and more prepared to take risks. SMEs are generally regarded as providing a friendlier and less formal working environment than larger firms. As Stavrou-Costea and Manson (2006: 111) pointed out: `The major strength of SMEs is flexibility in the way they manage human resources.' Storey et al (2010: 306) commented that: `The process of managing a small firm differs from that of the large firm, for small firms face distinct forms of risk and they organize their human resources differently and often informally.' HR issues in SMEs One of the major challenges facing SMEs is that of finding and utilizing human resources effectively and efficiently. But they may lack the resources