This study explores employee attitudes toward Human Resource Development (HRD) in Micro, Small, and Medium Enterprises (MSMEs) in Gujarat, India, focusing on the challenges and opportunities associated with HRD initiatives. The research employs a multiple case study approach to analyses various MSMEs and utilizes thematic analysis to identify key themes. Findings reveal that formalization of HR practices significantly impacts organizational performance, with larger organizations and their associations with bigger firms adopting more structured HRM practices. Despite this, many MSMEs rely on informal HR practices due to cost constraints and cultural factors, leading to inefficiencies and missed opportunities. The study highlights the importance of employee engagement, noting that HRM practices such as performance appraisals and participation in decision-making positively influence job satisfaction. Key challenges include limited training transfer and insufficient performance coaching, which hinder the effectiveness of HRD programs. The study concludes with recommendations for adopting modern HR practices, improving training mechanisms, and enhancing employee engagement to better leverage human capital and improve organizational performance.