Top 5 HR mistakes by SME employers
This month we’ve asked our HR and payroll outsourcing service JCHR to profile the top 5 payroll and HR mistakes that SMEs make.
Bill Larke, from the HR team, picks up on the HR angle…to read about the payroll top 5, please click here.
- Not dealing with ‘difficult’ issues
“I don’t think it’s the fault of SME employers, but if I were to pick one thing that I think SMEs don’t as a rule do well, it’s going to be not dealing with ‘difficult’ people issues, and I’m afraid this often stems from having really poor (or no) HR advice.
This leads to a tolerance of underperformance and sometimes of morale-sapping poor conduct. Aside from being difficult to live with, these things obviously impact the bottom line, and cause good people to leave, exacerbating the problem.
Employers, particularly smaller employers, are risk averse often because they don’t have access to good advice. I am enormously critical of the ‘call centre’ HR services so prevalent in the UK – these are nearly always tied to insurance policies, and whilst it may seem attractive to have tribunal costs and awards covered, the services protect the interests of the insurer first and foremost, and advice to SMEs is frequently so risk averse as to be practically useless.
As a result, employers are left not dealing with things that should and could be dealt with, and performance suffers. Good quality HR advice should help employers achieve necessary change, not give them reasons not to change.”
(How can an employer tell a good HR service from a bad one?
“I believe that any service that attempts to tie customers in for a period of years should be viewed with enormous suspicion.
These services, inevitably tied to an insurance policy, might seem a cheap option in the short term, but when added up over the multiple years required by the contracts it can represent poor value for money, particularly if employers can’t access good pragmatic commercial HR advice.”)
- Ignoring evolving employment expectations
“Times have changed but we still hear employers demanding a 5-day 40-hour week in the office. People’s expectations have shifted since covid and also due to generational developments. Today’s employee wants flexibility in their schedule and a better work-life balance, and vacancies are nearly impossible to fill without these things.”
- Reliance on spreadsheets
“HR transactional processes like managing holiday and sickness and updating employee records can be streamlined with HR technology. This helps in reducing administrative burden and potential errors.”
4. Lack of, or poor employment contracts
“Off the shelf or ‘borrowed’ contracts rarely provide the clarity or protection employers need, and when an employment relationship breaks down it can be tortious picking through undocumented history to try and understand what was expected and what was promised.
It surprises me too that so many SMEs fail to take simple precautions to protect their business and staff, or rely on blanket clauses that are ultimately unenforceable.”
5. Not communicating effectively with staff
“I was asked at an event the other day what would be the one change that could most increase employee satisfaction. Whilst I think most employees value flexibility in where and when to do their work, smaller SMEs have the added advantage of being able to tailor the employment experience to match individual’s wants and needs…but to know what they are, you have to ask your staff!”
If you’re thinking of outsourcing your HR or payroll needs, why not contact JCHR? Call us on 01635 553 299, email us at info@jCHR.uk, or contact us via our website and we’ll call you back.
