SMEs’ staff management skills not up to scratch

Small- and medium-sized firms' employers realise the value of their staff in driving forward business success according to a recent survey based on a telephone interviews with 500 SMEs.

However, too few SMEs focus on the need to motivate staff other than by financial incentives.

83% of the SME directors/senior managers surveyed see employees as their business’s most important asset, while 63% believe that attracting and retaining staff is as important to an enterprise’s success as providing good customer service.

However, the report, People Management in Growing Companies, commissioned from MORI by businesshr, a SME human resource advisory specialist, also examines SMEs behaviour in terms of expenditure and policies in the light of these opinions. It reveals that SMEs are not necessarily reflecting their views in their actions.

A key finding is that SMEs are concerned with their employees’ job satisfaction and staff motivation, but as many as 86% feel that financial incentives – salary and benefits – will do the trick in attracting and retaining staff. Only 28% cited good training and development opportunities for employees as important, with just 25% viewing achieving a good balance between work and home life as significant.

An overview of SME human resource policies illustrated that they tended more towards protecting the employer than nurturing the employee. 96% have formal employment contracts, 93% have disciplinary/dismissal procedures, and 88% have health and safety assessment audits and grievance procedures. Only about three-quarters have staff training and development plans and less than two-thirds have a formal appraisal system in place.

Businesshr managing director Ian Stobie commented, “Skills shortages and the rising costs of recruiting staff mean that it is vital for SMEs to retain key staff if companies wish to grow. Throwing money at someone who is bored will not buy their commitment or ensure consistent, outstanding performance.”

Interestingly, the larger SMEs (those with over 100 employees) tended to be more concerned about motivating and retaining staff, and their productivity, and placed more value than smaller companies on training and self-development, as well as having more systems and policies in place which motivate and support employees. 91% of larger SMEs have staff handbooks, 85% training and development plans and 80% have an appraisal system.

Manager of Advisory Services at businesshr, Tom O’Reilly, explained, “you can think like a corporate but on a smaller scale. SMEs need to get to the root of the issues that affect their employees [rather than just increasing their salaries, for example].”

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