How HR can make an impact in SMEs

Being an HR practitioner in an SME is a very different experience to working in a large organisation.

Practitioners may be working with a management team who see HR as operational rather than strategic. They often don’t fully understand the contribution good people practices can make to their growth and profitability.

We are operating in a constantly changing environment, where the needs of the business can shift almost overnight as it goes through various stages of growth. And, of course, HR practitioners in SMEs are riding solo – with no-one to discuss challenges or share ideas with.

How to make the maximum impact as an HR professional in an SME was the subject of this week’s CIPD London Regional Conference, sponsored by Cezanne HR. Delegates shared the challenges of working in SMEs and discussed what HR support should look like at the different stages of company growth.

So what are the main challenges HR practitioners (or those who are responsible for HR) will typically face in an SME environment? And how can they best address them?

1. Managing expectations

As the CIPD points out in its report ‘Making Maximum Impact as an HR Professional in an SME,’ motivations for having an HR person on board can be very different. Some leaders ‘get’ the importance of having someone to champion the people agenda. Others see HR as a fire-fighting service: there to keep them out of court.

Some businesses have reached a ‘tipping point,’ where the owner-manager realises that dealing with people-related issues is taking up too much of their time. Other companies have realised they need help with a specific issue, such as dealing with skills shortages or recruiting the right people.

If you are clear about what is driving the desire for an HR presence, it will make it easier to manage (and if necessary challenge) expectations about the scope and remit of the role.

2. Establishing priorities

In a fast-moving SME environment, it’s never going to be possible to do everything. So it’s important to be really clear about what’s a priority and where HR can deliver the most value for the business.

To get a proper grip on this, you need to develop a deep understanding of the operational side of the business. It’s about spending time on the front line, talking to employees and understanding what makes the business tick—as well as what’s getting in the way of productivity.

The real challenge, of course, is balancing short-term imperatives with the longer term needs of the business. Any HR practitioner in an SME is inevitably going to have to spend a significant amount of time ‘hands-on,’ but it’s important to also make time for the strategic stuff that is going to help drive the business forward.

3. Getting sign off for people initiatives

Getting budget sign off for people-related initiatives can be a real challenge in an SME. Funds are typically tight and every penny is scrutinised. HR practitioners interviewed in the CIPD’s research report suggest that pointing out the risks associated with not taking action, and highlighting the benefits and cost savings, is often the key to success.

A proposal to bring in an HR software system is a prime example. If the owner/managers understand that value-adding strategic work won’t be done unless HR is released from some of the admin and that getting a better handle on absence will save them money, they are much more likely to give a new system the green light.

4. Demonstrating your credibility

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If HR is to have a real impact on the business, practitioners need to have both the ear—and the respect—of the leadership team. This isn’t always easy.

Particularly if the owner/managers view HR solely in an operational light. Becoming a trusted adviser means demonstrating commercial awareness, talking in

Becoming a trusted adviser means demonstrating commercial awareness, speaking in a language the leadership understand and showing that you have a real understanding of the direction the business wants to take. If HR people are to be taken seriously, they also need to develop a good understanding of the market or sector the business operates in—and to be willing to contribute to discussions about wider business problems as well as HR issues.

5. Driving your own personal development

Continually developing knowledge and expertise is vital for any HR practitioner—but is particularly important for those without colleagues to discuss new ideas or the latest thinking with. Finding opportunities to network with other HR people in SMEs is a great way to keep learning.

Engage with your local CIPD branch and find out if there are other local HR forums (sometimes organised by Chambers of Commerce) you could get involved with. Visiting other organisations who are not necessarily competitive, but may have similar challenges, is also a good way of building a support network. A mentor can also provide a valuable external sounding board – CIPD branches sometimes run local schemes, or if not, look to your LinkedIn network to see if you can find someone informally.

‘Making Maximum Impact as an HR Professional in an SME’, CIPD, April 2015.

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