Tackling the Top Three HR challenges in SMEs

This week’s CIPD ‘HR in SMEs’ conference provided a fascinating insight into how businesses of widely varying types and sizes are tackling their HR challenges.  The presentations highlighted some very diverse approaches – but what was clear was that pretty much the same issues were keeping HR people awake at night.

Performance management was mentioned frequently, as was the challenge of how to get HR heard and understood within the business.  There was also much debate about how to retain a small ‘family’ feel and keep the best bits of small business culture in a rapidly growing SME.

Lots of great examples and ideas were shared – but what struck me was that there was very little mention of the role technology can play in helping SMEs tackle their people challenges.

The latest generation of HR software is not just about automating processes and streamlining administration (although it does of course do that rather well).  It also has the capability to re-energise communication, make people feel valued and drive high performance in teams.  In an SME, where the HR load often falls on just one pair of shoulders, it can also free up a significant amount of time so that practitioners can concentrate on the strategic aspects of their role.

Here’s how HR technology can help with three of the top challenges identified by conference delegates:

Driving high performance

In an SME every person’s contribution counts – and the business needs each employee to be performing at their peak.  It’s all too easy, however, for poor performance to get swept under the carpet – either because managers are too busy fire-fighting or are not equipped to handle ‘difficult’ conversations.  If the poor performance of one individual is left to fester, however, it will soon have a knock-on effect on the rest of the team.  People will resent the fact that a colleague is not pulling their weight and may think they can get away with letting their own standards slip too.  HR software can’t have the conversation for you – but it does make it much easier for managers to set clear objectives, monitor the performance of their people and provide support and development where needed.

Regular performance conversations allow managers to identify and focus on the strengths of their team (an approach which was working successfully for several of the SMEs presenting at the event).  And when there’s a place to record whatever’s been discussed and agreed, it’s easier to spot people who may be struggling or to nip any problems in the bud early on.

Raising the profile of HR

Helping the MD to see HR as an enabler and driver of growth rather than yet another business overhead was a challenge voiced by several conference delegates.  Business owners realise they have ‘to do HR’ properly as staff numbers start to grow – but they often don’t have a full understanding of the real benefits a strategic approach to people management can bring to the bottom line.  Managers within the business also typically view HR as ‘the personnel department’ and only cross the threshold of their office when a problem (often avoidable) has occurred.  A good HR software system provides HR with the ammunition it needs to push strategies through and demonstrate business impact.  The latest systems are a rich mine of information which the business can use to spot trends (high absence levels for example), save money and inform key strategic decisions.  A good software solution puts the latest information at the senior team’s fingertips and ensures they have an up-to-date view of what’s really happening in the business.

Keeping the best of an SME culture

SMEs typically have energetic, fast-moving cultures with teams that are enthusiastically pulling in the same direction.  It’s easy to lose that ‘entrepreneurial’ feel, however, once the business gets beyond the start-up phase and begins to grow.  The owner is perhaps not as visible or present as he or she might have previously been.  There’s a danger that without daily interaction with the leadership team, people can start to feel less valued and not so much a part of what’s going on.  The social platforms that come with some of the latest generation HR software can do much to keep everyone informed, involved and engaged.  They provide a central platform where managers can keep people up-to-date, share success stories and invite employee input.  It makes it much easier for people to collaborate and voice their ideas – and can help to generate a sense of excitement about new projects or clients.  Theses social portals also provide a space where corporate values can be shared and reinforced and individual employee efforts can be recognised.  It helps keep everyone connected – especially at times of change or growth where people can easily start to feel disengaged.

What are the top three HR challenges in your SME?  Let us know what’s keeping you awake at night.