Sector of small and medium-sized enterprises has been recognized as one of the fundamental pillars of economic stability and economic development. Small and medium enterprises represent an important contribution to the creation of new businesses and the expansion of new business practices, they make a significant contribution to the gross domestic income, a particularly important role in the countries that are in transition. The knowledge has always meant the most important resource of a business entity, which is particularly emphasized in today's business conditions. A strong competition existing in all markets and all business activities as well as the high extent of technology development which is at hand to all interested companies due to accessible information hinder the process of gaining a good market position. The bearer of these intangible components of business is manager's and employee's knowledge, which as integrated in the adequate organizational structure and with the stress on meeting customer's needs, makes up the core of the organization's competence and the basis for making competitive advantage. The aim of this paper is to describe and explain components of the intellectual capital as well as its significance and role in small and medium enterprises in the Republic of Serbia in today's business conditions. The survey was conducted on a sample of 120 interviewed respondents, employees in SMEs in the Republic of Serbia, who are in positions of managers, top managers or owners of the organization and workers. The research contributes to confirm the theoretical assumptions about the importance of human resource management in small and medium­sized enterprises, which could have practical implications for finding better professional solutions in the context of the specific characteristics of small and medium-sized enterprises.