Can small businesses benefit from an HR function?

HR in small businesses

Small businesses make up more than 99% of private sector business and accounts for 60% of the private sectors employment, so there are a lot of them out there. Unfortunately another statistic is that the lack of the correct management skills is responsible for the failure of over 50% of small businesses.

Budgets are tight when small businesses start out and therefore a lot of the managers are expected to multitask which means dealing with employee issues as well as growing the business. This focus on rapid growth, results in the need for investment in an HR function being overlooked, which can actually have the opposite effect and halt the growth in its tracks. Without the training required or the skills that HR brings, decision makers are not often able to identify and use the talent within their business to be able to push it forward in the right way.

In most cases, and we see this a lot, small businesses approach us once the problems have already started or when a major change happens in employment legislation. It seems that the mindset of small businesses is that the HR function is a reactive one, when in reality it should be part of the strategic planning they need from the outset.

This is supported by CIPD who have been piloting a scheme that gives small businesses access to HR, allowing them the same benefits that the bigger companies have. Obviously this has been met with mixed reactions from HR Consultancies who feel it is encroaching on their territory.  Maybe that’s true, but at least it has put the need for HR in the spotlight which is a positive thing. It is also known that small businesses like to deal with other small businesses, such as HR consultants, as they understand each other, so a national scheme won’t be for everybody.

Wendy Read, Owner of HR Revolution comments,  “People are the key to a successful business, without them the wheels just do not turn. The problem is that most businesses don’t focus on their people and only concentrate on the bottom line. Our philosophy is simple; focus on your people, hire, on-board, train, manage and develop them and the bottom line will look after itself”

For more help and advice on growing your business, training your people and planning for the future please get in touch.

Call: +44 (0) 203 538 5311 OR email us: info@hrrevolution.co.uk today, to find out more…

The HRRev Blogger

 

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