HR burden is stifling growth

Worryingly, three-quarters of owner-managers say that new business development and customer service is suffering because of the HR burden.

New research by HR software specialist Croner reveals that one in ten MDs are spending up to 15 hours, or two days, a week on HR – too much in the eyes of many.

“Without a doubt, HR is becoming more burdensome for UK businesses large and small,” says Michael Page, commercial product manager at Sage’s small business division. “Compliance and regulation in this area has increased dramatically in the past few years and is now one of the major pain points according to our customers.”

The difficulty with HR is that if you get it wrong, it can be expensive. The appropriate processes have to be followed, says Richard Smith, head of service development at Croner.

“Too many key people in SMEs end spending a lot of time, effort and money sorting out HR problems. But what’s tricky is that you can’t just ignore HR regulation, you have to deal with it.”

Simon Ball, CEO of Coverzones, the small business insurance portal, says that claims that the government has lowered the burden of red tape are “nonsense”.

“Dealing with time-consuming red-tape is something which can make or break a business. But for each process that’s been taken away, the government’s managed to match it with the introduction of additional bureaucracy.”

Not all entrepreneurs are against red-tape, however, with some viewing it as a necessary evil.

“Human resources is a hideous phrase – it makes it sound anything but human. But the truth is, as an owner and MD, my company’s entire success depends on people. I’d be bonkers not to spend as much time on them as I possibly could,” says Martin Hennessey, founder of The Writer, a business writing consultancy.

“Is regulation a pain? Hell yes. But is it, on balance, a good thing for my business? I believe so.”

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