The power of small
Consume a diet of the popular business press and you’d be forgiven for thinking only large companies are worth working for. But SMEs (generally, those with fewer than 250 staff) account for the majority of employment, and they’re increasingly seeing the value of a dedicated HR function. Do professionals benefit more from being at a small business?
Micro-businesses often take an organic route to employing an HR professional. “Many companies start with an office manager who begins by answering the phones, then starts taking note of holidays or arranging interviews,” says Jill Miller, research advisor at the CIPD. “This person may then decide they want more training, so the employer supports them through their CIPD qualification and the HR function grows from there.”
For others, however, there comes a tipping point where it makes sense to bring in either a dedicated HR manager or work with a consultant. CIPD research says that around a third of SMEs hired their first HR professional because they needed to ensure they had the right skills and talent, while 37 per cent wanted someone to deal with policy and processes.
Encouraging owner-managers to see the value of HR can be a challenge at first. Dominic Ceraldi, HR manager at Pimlico Plumbers, was initially brought in as “the recruitment guy” by entrepreneur Charlie Mullins seven years ago. Ceraldi says: “Charlie was doing everything, so he wanted someone to come in and help with recruitment. I had to explain where else I could add value.”
Ceraldi had a busy first six months, not only putting in place processes but also trying to convince staff he was the person they should approach with issues. “People would go straight to Charlie with a problem because that’s what they were used to. It took him a long time to let go and let me make more decisions.”
According to Grant Hughes, head of the SME division of Barclays Corporate and Employer Solutions, it’s not uncommon for entrepreneurs to be cautious about HR. His research found that three-quarters of SME leaders prefer to control the implementation of business processes such as pensions auto-enrolment, only drawing on support where required. “Business owners tend to have a lot of confidence in their own ability to manage. They can see HR as an additional layer of bureaucracy, so they react to things on a day-to-day basis,” says Hughes.
But while many SMEs handle HR issues reactively at first, there are some that opt to bring in more senior HR expertise at an early stage. Caroline Farren-Hines, head of HR at injury management company RehabWorks, joined the business when there were around 75 employees. Her initial brief was to review policies and procedures, issue new contracts and put a benefits programme in place.
“Once my contract was made permanent, I was able to do things like introduce an employee satisfaction survey, and bring in a health and wellbeing team,” she says. Having worked in a company of more than 500 before, she enjoys being able to make a visible impact on the business. “I’m on the senior management team and everything’s very open and transparent. The initiatives I’ve rolled out have been similar to those in larger companies, but I’ve got far more exposure to high-level strategy than before.”
Whatever the reason you’re brought in, working for a smaller employer has many positives. SMEs may be able to offer greater flexibility or more options for part-time work, for example, while providing unbeatable exposure to the commercial aspects of the business. What it won’t be is dull.
The CIPD’s HR in SMEs conference will be held on 13 April 2015: cipd.co.uk/events/hr-sme