Companies in the SME sector who are failing to utilise the value of human resources in their operations can lose on average almost £100,000 each per year. Managing and administering day to day HR operations as well as training to keep up with the latest statutory regulations consumes valuable time. This is the critical time when a small business should be focusing on their strategic issues. Jean Bertrand de Lartigue, Chairman of small business HR specialist HR2all, investigates the path to financially rejuvenating your small business operation by improving effectiveness and motivating your workforce.

“It is a bold statement, but at HR2all we claim that we can save any small to medium sized business £1000 per employee by assisting them to achieve the significant benefits derived from a highly talented and effective workforce. We introduce tools, methods and processes to achieve this. HR is often still seen as the office social worker who once a year complies a list of sick days and who delivers your pay envelope at the end of the month. HR should be seen as a key function as important to strategic business planning as any other. Finding and retaining specialist staff in increasingly difficult, employment law is a potential minefield and training and maintaining staff morale is reflected in any company's profits. HR issues and responsibilities spread across the entire workplace, with more line managers involved in HR processes than ever before, there are now more opportunities to optimise HR effectiveness, but you will have to think a little more laterally to find them.” explains Jean Bertrand.

It is understandable that SME's have little HR expertise, after all the head of the business is usually an expert in their field and wants to concentrate their time on that side of the business. The personnel issues of their operation will normally come a long way down the list of priorities, as long as their employees do their job, are paid and seem happy any further investigation into their potential to increase company productivity are often put on the back burner. Also sidelined is any investigation into the amount of time consumed by handling personnel issues, it is seen as a necessary expense and is often not assessed for effectiveness towards the bottom line.

A quick assessment to ask yourself if you are using your HR properly would be to look at your company as a structure of employees, job roles and money makers. Then ask yourself a series of questions such as does this structure look effective?, are they doing the right job for their job role?, when was the last time you had a discussion with them to find out if they working towards the main company goal?, when was the last time you asked them if they had any ideas for improving the business?, Are they worth the money? Could they benefit from training?. If you are vague on any areas such as these then it is more than likely that HR is focusing purely on the administration side of the HR function, payroll, absenteeism etc…rather than strategic assessment of what is best for the business and best for the people working within it.

Can you be confident that your company knows the latest in employment laws? You can be sure that any employee looking to take you to an employment tribunal will be aware of the laws and of their rights.

For instance, did you know that?

If your HR person knows the above then it is good that the knowledge is there, but how much are you paying them to know this? And how much of their time is used keeping up to date on all of the constant law changes?

Saving Money and Increasing Motivation

Saving money does not always mean cutting jobs it means increasing job effectiveness, increasing motivation does not mean paying more money it means investing time and knowledge in people. Combine to two and the bottom line can show a definite improvement.

For example by proactively investing in training for a salesman to learn better presentation skills, you have increased his effectiveness and made him more motivated as he has gained knowledge and his sales should increase. The cost to the company is cancelled out by the increased sales. Without a strategic approach to people this benefit to the business would be overlooked.

Another example may be an assessment is carried out into the amount of work lost due to some employees being parents and having responsibilities to handle family arrangements. Time could be reclaimed by implementing a flexi time approach to work hours, increasing employee motivation and productivity by understanding their needs. This also retains their skills within the company for the maximum amount of benefit, rather than having to find a different employee who may not be so skilled. Again this depends on HR having the time to assess employee's needs.

Saving More HR Time

Another way of saving time for the HR function within a small business is to involve the middle and line managers in the HR processes. With modern HR technology line managers will have all their employee information at their fingertips so they can make adequate decisions without the need for HR to find information for them, saving the line manager time also. The time saved by utilising the people closest to employees in specific areas frees up the HR administration time as well as mitigating the ‘social worker' aspect of the HR function. Employees can simply discuss issues with line managers rather than making an appointment to see the HR person which is often intimidating and is negative to the highlighting of problems that may occur in the work place.

Where to Start

To change to a more effective HR approach, first assess the HR skills you have in-house. The most cost effective solution following that is to then look to outsource those skills that you do not have or that are swallowing up too much of the HR functions current time. For example if 80% of your HR time is used doing payroll and administration and your HR person is capable of strategic HR work then outsource the payroll and administration. If they are not qualified enough to do the strategic work then outsource to a consultant who can then implement strategically for you as well. If hiring a consultant, ensure that a bespoke tailored solution is provided including coaching and training, your business is unique and therefore needs a unique solution. Off the shelf offerings may seem cheap but they may not be appropriate for your market, customers, employees or ethos of your company.

HR2all in partnership with XXXX are offering 4 free seminars located in xx,xx,xx and xx. These are for those involved in small business who would like to know more about how to improve their productivity and save money using HR. Free one to one consultancy sessions at your company are also available on request at the seminar. Please see contact xxxx for information.