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HR contractors don’t understand small businesses

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Like every company in these challenging days, our spending is constantly under review, our suppliers continually assessed for price, service and that slightly offensive yuppie term, V for M (or “value for money”, for those who have escaped it). That one has always grated on me after being told what wonderful V for M was offered by an up and coming headmaster on the tour around his establishment. Somehow, it didn’t seem the right selling point to me when it came to assessing where to send my children to school.

However, V for M is what we undoubtedly have to look for these days, when we note with the usual grimace the very large sum appearing for professional fees. My business is of the unfortunate size that lays itself grimly open to these. We’re too small to do our wages in-house, or to have our own accountant; we’re too small to have an in-house health and safety specialist, and too small to have our own in-house HR specialist. That said, with 30 odd staff, the legal requirements on us for the above are as high as any corporation. The government may make the odd gesture towards the five-and-under employee but no such concessions for us.

I don’t have a problem with the financial side of this. Health and Safety, the bug bear which has such an appalling reputation, I don’t actually have an issue with either, having developed a pretty sound mix of high in-house standards and comparatively low cost outside checks and training that keep my staff safe – a necessity I am more than dedicated to achieve.

It is the stupendous amounts of money that we have paid out to HR companies over the years that I really struggle with. There are two huge problems for firms of our size on this. The first is the volume of ever changing legislation combined with the no win / no fee boys that will leap to take virtually any case against a business, safe in the knowledge that the majority of small firms can do little or nothing but crumble to a settlement to avoid the fatal blow costs of actually ending up in court. I know the government has moved on this to some small extent – the duration of employment being lengthened again for unfair dismissal, the applicant having to pay out a small amount to bring a case – but I think in real terms this will have only a ripple of effect.

My biggest issue though is the two hats that outside HR contractors for small businesses attempt to wear. We use them to keep our legal paperwork up to date in much the same way we do a Health and Safety contractor. We use them for legal advice – now this already is dangerous ground for the uninitiated. I have in my time been given absolutely 100 per cent inaccurate legal advice by these one man bands – how incredibly dangerous for us. On top of that, I have come across many who will claim that you need an employment solicitor as well. For small firms, how unworkable is that as a financial proposition every time you have a query.

My biggest grouse, however, with the small HR company who endeavours to service companies of our sort of size, is this: They claim to be able to sort out issues with staff when they simply do not know enough about the companies’ needs. Time and time again, I have naively approached a current HR advisor over a problem with a particular staff member, asking for training or advice to solve it. They have listened for five minutes flat. Invariably, they book themselves in for a session with the individual and come back and tell me that I am not hearing that person’s concerns, or why the person is not performing. The reality is that I have heard their concerns/aka their excuses until I am blue in the teeth and have been stupid enough to hope yet again that a “professional” will waive a magic wand.

Nine times out of ten, they also come back with solutions that are totally unsuited to the needs of the business. This is partly because they need to cover their own backs and be so employee friendly as to never be the cause of any legislation, but also very simply because they don’t know enough about the business. They cannot. They are outside contractors. Nor do they ever spend the same amount of time listening to the employer’s concerns. So, what ends up happening is that, as opposed to any workable solution, you end up with a smug employee who either thinks they have been understood and or knows damn well they have successfully pulled the wool, a large bill and being no nearer the solution whatsoever.

Many of these independent HR contractors come from having worked for large corporates. They endeavour to apply chocolate box, one suits all rules to small businesses. It doesn’t work. Small businesses have different rules. They are inevitably more reliant on personal relationships between all parties. They are almost always in this day and age up against it financially. In the case of industrial businesses, such as ours, you inevitably have a proportion of jobs worth people – albeit good ones – but who will simply never be motivated by all the company involvement schemes that might work in a small office environment.

If I have a new year’s resolution. It is to have more belief in my own knowledge of my staff and my own relationships with them; to sort out my own problems with them and trust that knowledge and stop spending the cash my business needs on having people who don’t have the necessary facts tell me different.

Jan Cavelle is founder of the Jan Cavelle Furniture Company.

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