This paper presented the overview of the human resource practices in small and medium enterprises. The nature and importance of small and medium sized enterprises (SMEs) sector in Pakistan’s economy is unparallel. Hence this paper discussed the general views of the SMEs operating in Pakistan, the current employment sector and the HR practices in SMEs. The arguments developed in the paper supports the contention that SMEs in Pakistan have great potential for greater economic and social development. Some key issues pertaining to Pakistan’s SMEs are also identified.