Read the given passage carefully and answer the following question

World over half to two-thirds of all businesses are Small and Medium Enterprises (SMEs). This turnover (1) is much higher. The benefits of SMEs have created a special status and importance in the Five-Year Plans right from its inception. SMEs must keep in view that employees are as important as customers and suppliers. Since the number of employees is less so, each and every employee in SMEs is very important. And when potential (2) is very high, SMEs face a problem to continue. SMEs know each and every employee because of fewer numbers. So, their challenges of talent management can be handled on an individual basis. There is greater involvement of top management because the founder in most of the cases was singly responsible for HR activities. SMEs need to be more formulation (3) by adopting the best talent management practices because without empowering HR, no business can run. 50% of the employees can never have come through employees' references or internal job postings and screening methods used for acquisition are also very less. HR managers must be responsible not only for ends but also for means. Attracting and retaining talented SMEs is very tough due to fewer opportunities. The image of small size is the biggest hurdle to attracting talent. Since the motivation is not directly tied to employees' pay packages, several offer options must be there to attract and retain employees. SMEs don’t involve their employees in strategy proportion (4) and in decision-making. So this is a demotivating point for the employees (SMEs are also less concerned about succession planning). There must be effective delegation and decentralization of decision-making power and authority to boost the talent of the employees. Co-ownership needs to be encouraged to leverage the talent of the people by making the right balance of power between employees and employers.
 
SMEs are pivotal to economic development. Since a large number of the workforce is employed in SMEs they have to manage talent management strategies. This is the only key to success in meeting the challenges of the globalization scenario. SMEs face resource constraints, especially new technology solutions. So, by proper talent management practice, they can easily survive in the competitive environment problem of a good talent pool for SMEs. This is the challenge that arises because of the fact that big companies use a variety of talent acquisition practices but in SMEs, the employees are acquired by the owner or manager himself. Another problem is that the HR department for SMEs is usually not more than one person who wears many hats. SMEs can’t afford in-depth talent management practices because of the fewer economies of scale. This is the biggest challenge for SMEs. SMEs don’t hire an active database of competitive (5) hires. They place advertisements when a new vacancy arises without considering past databases. SMEs don’t offer standard rewards & their compensation system is not well designed. A lack of career planning strategies makes hurdles in the pathway of talented employees. SMEs generally provide fewer training & developmental opportunities.