Human Resource Development in Small Businesses: The Role of Informal Learning
Training and development are essential components of Human Resource Management (HRM). However, for many small scale organizations, implementing formal training programs can be difficult due to cost and time constraints. Formal training often involves professional trainers, structured sessions, and workshops, which may not be feasible for businesses with limited resources. As a result, small organizations tend to rely more on informal approaches to employee development.
Informal learning plays a key role in employee development, often supported by informal training practices in the workplace. It occurs through observation, interaction, and hands on experience. This aligns with Experiential Learning Theory, which emphasizes “learning by doing” (Marsick and Watkins, 2001). In the workplace, employees gain skills through real-life situations such as handling guest interactions, resolving complaints, and performing daily tasks. This also allows employees to learn from their mistakes and improve.
Similarly, Social Learning Theory (Bandura, 1977) explains that individuals learn by observing others. In the hospitality industry, employees often develop their skills by watching experienced colleagues manage complex situations. For example, observing how senior staff handle guest complaints or operational challenges helps new employees understand expected standards.
The 70-20-10 model further supports this approach by suggesting that 70% of learning comes from experience, 20% from social interactions, and only 10% from formal education (McCall, Eichinger and Lombardo, 1996). This highlights the importance of informal learning supported by guidance and coaching.
Despite its advantages, informal learning also has limitations. Employees may adopt incorrect practices if they learn from unskilled colleagues. Individual differences can also affect learning effectiveness. Without proper supervision, this approach may negatively impact performance. Research shows that informal learning is most effective when supported by guidance and feedback (Noe et al., 2014).
In the hospitality industry, informal learning is widely practiced due to high employee turnover and operational pressures. In my experience working in a boutique hotel with a small team, employees often learn through observation and real-time practice, supported by informal training such as on-the-job guidance. While this saves time, it requires close supervision to maintain service quality.
Conclusion
Informal learning can be an effective training method when supported by proper guidance and feedback. Incorporating basic HR practices such as supervision and one-to-one coaching can enhance its effectiveness and organizations can develop skilled employees even without following the concept of formal training. In hospitality, soft skills like empathy and problem-solving are best developed through experience, reinforcing the idea that such skills are not only taught but also learned through practice.
Figure 02: Formal Training and Informal Learning in Organizations (Source: Brown, 2023)Reference List
Bandura, A. (1977) Social learning theory. Englewood Cliffs, NJ: Prentice-Hall.
Marsick, V.J. and Watkins, K.E. (2001) ‘Informal and incidental learning’, New Directions for Adult and Continuing Education, 2001(89), pp. 25–34.
McCall, M.W., Eichinger, R.W. and Lombardo, M.M. (1996) The career architect development planner. Minneapolis, MN: Lominger.
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M. (2014) Fundamentals of human resource management. 6th edn. New York: McGraw-Hill Education.
Edly (2024) Formal and Informal Education: Explaining the Difference. Available at: https://edly.io/blog/formal-and-informal-education-explaining-the-difference/(Accessed: April 2026).
Brown, H. (2023) Formal training vs. Informal learning. [Video] Available at:
Very interesting topic Nathasha. I think the connection to hospitality was a perfect fit since that’s an industry where learning by doing is so essential. It’s a great example of how informal training works in real world. the hospitality industry really thrives on the "see one, do one" approach. when you add structured feedback to those real-world moments, you turn everyday tasks into a powerful, low-cost talent pipeline.
ReplyDeleteThank you for your comment. I really like how you framed the see one, do one idea captures the essence of informal learning perfectly in hospitality. I also agree that adding structured feedback to real work situations is what turns everyday tasks into consistent skill development rather than just experience.
DeleteThis is a very insightful blog that clearly highlights how human resource development plays a crucial role in strengthening small businesses by improving employee skills, productivity, and overall competitiveness.
ReplyDeleteHowever, how can small businesses with limited financial and training resources effectively implement HR development initiatives while still maintaining day-to-day operations?
Thank you for your question. Small businesses can manage HR development by integrating learning into daily operations rather than treating it as a separate activity. Simple methods like on the job coaching, peer learning, and short informal feedback sessions can be very effective without disrupting workflow or requiring high costs.
DeleteThis is a very practical blog on how small businesses can use informal learning as a powerful HR development tool. I really liked how you connected experiential learning, social learning theory, and the 70-20-10 model with real hospitality workplace examples, which made the discussion both academic and realistic. It clearly shows that even without expensive formal training, small firms can still build employee skills through observation, coaching, and real-time guidance. However, how can small businesses ensure that informal learning remains consistent and does not lead to employees adopting incorrect practices over time?
ReplyDeleteThank you for your thoughtful feedback. You raise a very important concern about consistency in informal learning, and I completely agree that without proper guidance, there is a risk of employees adopting incorrect practices over time. This is why even in informal systems, the role of supervisors and regular feedback becomes critical. It helps ensure that learning remains aligned with organisational standards while still allowing flexibility and real time experience.
DeleteA very fair point about the limitations of informal learning. If we rely solely on 'observation,' we risk the 'Blind leading the Blind'—where incorrect practices are passed down like traditions. This is why Social Learning must be paired with structured feedback. In our industry, a mistake in guest interaction is a cost. Informal learning is a powerful tool, but it requires a 'Safety Net' of feedback to maintain professional standards
ReplyDeleteThank you for your strong point. I completely agree with your “Blind leading the Blind” idea. It highlights the real risk of uncontrolled informal learning. Your point about a safety net of feedback is very relevant, especially in hospitality where small mistakes can impact customer experience directly.
Deletestrong case for *informal learning* when it’s backed by guidance and feedback. Instead of costly formal programs, supervision and one-to-one coaching can build skilled staff effectively. In hospitality especially, soft skills like empathy and problem-solving grow through real practice, not just classroom training — showing experience is often the best teacher.
ReplyDeleteThank you for your feedback Iresha. I agree that informal learning becomes most effective when it is supported by supervision and one-to-one coaching. In hospitality, practical exposure really builds soft skills, but guidance is what ensures that experience turns into consistent performance.
DeleteThis is a really insightful take, especially because small businesses are often overlooked in HRD discussions. Your focus on informal learning is spot on—most capability building in smaller organizations doesn’t happen through structured training programs, but through day-to-day experiences, peer support, and hands-on problem solving.
ReplyDeleteI like how you highlight the practical side of this. In small businesses, limited budgets and time constraints make formal L&D difficult, but informal learning—like mentoring, job shadowing, and learning-by-doing—can be just as powerful, if not more relevant. It’s closely tied to real work, which makes the learning immediate and impactful.
Thank you for your detailed and insightful comment. I really appreciate your perspective on small businesses being overlooked in HRD discussions, as they actually rely heavily on informal and experience based learning. As you mentioned, most skill development in such environments happens through day-to-day tasks, peer support, and hands-on problem solving rather than structured training programs. I agree that this makes learning highly relevant and immediate. However, the effectiveness of this approach still depends on how well managers guide and support employees during these experiences, so that learning is both practical and consistent with service standards.
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