Navigating the SME HR pandemic minefield

Ask most SMEs what they wish for most (especially right now), and the chances are they’ll say growth and sustainability. And yet it’s one of business’s greatest ironies that when it does actually happen, it’s feared almost as much as it is enjoyed – especially today with myriad new employment and pandemic issues to manage, says Samantha Hulson, HR expert and founder of Birch HR.

The problem with success right now (and ensuring it continues), is that SMEs will suddenly need to confront doing things more becoming of a ‘proper’ business. This means having strategies in place to apply government pandemic initiatives in order to support the future survival of the business and help for its employees.

Rather than making decisions ad-hoc, there is the requirement to define more consistent recruitment and set strategies for pay and reward, as well as to create policies around a multitude of emerging concerns.

5 crucial HR areas SMEs need to focus on right now

1. Look for professional support with, for example, establishing performance metrics and wellbeing programmes.
2. Update your business continuity plans and, of course, your working from home/agile working/redundancy policies.
3. Refresh your recruitment campaigns, invest more time in employee engagement and review your employee benefits to see if they are still fit for purpose.
4. Keep on top of employment initiatives such as furlough, the start of funding for 10-20% of the wage payable, job retention scheme closure and risk assessments for employees fearful of catching COVID-19
5. Have a clear and consistent management position for employees who are caring for vulnerable persons or are ill with COVID or other medical conditions

The list goes on. For some it might even comprise defining a ‘culture’ for the first time. Setting out what their purpose is for their future employee brand proposition.

“SMEs need to morph into a grown-up company. Put simply, they need HR.”

An HR mental block

The mental block some SMEs have around implementing an HR strategy is shown by data from consultancy The HR Department, which finds less than 60% of SMEs invest in HR.

Typically, a lack of need for HR – whether it’s choosing between appointing their first HR professional (internal and/or through an outsourced solution) or simply muddling through using existing staff – is often excused through a lack of headcount; that they have too few staff to warrant it.

The same research finds, for example, that 68% of those with 10 or fewer staff don’t have an HR function. And it’s still 29% for those with between 50-250 employees.

I still see SMEs where staff don’t have employment contracts or decent core policies – the impacts of which only surface when firms come under stress and legal challenge.

And nothing is as challenging right now as the effects of COVID-19.

SMEs are under leadership and people-related pressures like never before. There will be entirely new challenges needing attention, things such as:

• managing the health and wellbeing of their remote-working, and increasingly isolated, staff;
• around communicating, or
• creating new strategies for growth and resilience and ensuring employees know how they fit in.

New guidelines around government support for funding wages are stacking up on top of already complex new rules around IR35 (essentially whether workers can be defined as employees or self-employed contractors).

“COVID-19 will only magnify these as people-centric policies become more important.”

Help them adjust, exit, reskill or upskill

What the coronavirus pandemic is revealing is just how necessary and centre stage an SME HR function or ‘proper’ support has become.

Firms facing disruption will need to completely re-think where they look for talent, how they hire virtually, redeploy their existing talent or manage redundancies. HR expertise will need to be central in all this in terms of how it supports directors, leaders and people – be it to help them adjust, exit, reskill or upskill.

Rafts of extra COVID-related rules and regulations and employee anxieties will no doubt have added to this this. But what SMEs should really be focused on now is understanding that HR is needed more for creating the right organisational and cultural development conditions. Focus here will give them the best chance of riding out their leadership and people issues once the disruption caused by COVID-19 starts to wane.

“SME-owners need to be looking at the ‘value-add’ impact that robust, courageous, strategic and operational HR thinking brings to their business – and to the board – rather than looking at it from purely a ‘cost’ point of view, as so often happens.”

Entrust to those with professional grounding, knowledge and experience

SME businesses naturally tend to be founder-led – with followership often built around them. But COVID-19 is speeding up the process by which they need to ‘let-go’ and entrust their leadership and people strategies and processes to those with the proper professional grounding, knowledge and experience.

To their credit, SME bosses are highly entrepreneurial and resilient. It’s they that have often turned an idea into a fledgling business and it’s through their dedication and hard work that they are often seen as inspirational people.

“In the early years of a business, often it’s this inspirational element that attracts people to work with them.”

But COVID-19 has cut across all this. Its impacts are being equally felt by businesses with just a handful of people as it is those with 100 or more. Right now, business change curves are all about how leaders and teams work together. HR’s job is to enable people to transform to increasingly digital ways of working and to cope better with an ever more VUCA (volatile, uncertain, complex and ambiguous) world.

In an ideal world, the best leaders will be thinking about these things before the red flags which suggest problems with culture, engagement, agility and business continuity during a pandemic start to emerge.

Forget looking at how many actual staff your organisation actually has and look instead at whether your people are starting to behave differently. Have leadership plans in place to respond to this and prepare the business for the future.

This is when HR really needs introducing into SMEs. There is specialist support available and, if done properly, most of these issues can very quickly be turned around for the better.

Birch-HR offers its clients fast, responsive and flexible access to a team of commercially focused and knowledgeable senior HR professionals.

About Samantha Hulson

With over 20 years strategic and operational HR experience in the public and private sectors, Samantha has led several outstanding HR traded services and also understands what it takes to start and lead your own business.

She has successfully led on the planning and implementation of numerous complex change management projects in areas such as performance management/pay frameworks, new contracts of employment, centralisation and culture change.

Sam has successfully supported many SME businesses with their HR challenges across multiple sectors including engineering, construction, charities, education and professional services.

Samantha is a Chartered Fellow of the CIPD (FCIPD) which is the highest membership of people professionals in the UK.

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