Human Resources

When you’re a small team, or you’re just starting up, it’s tempting to put HR (Human Resources) on the back seat.

While growth is likely to be among your goals, it’s important that people still feel part of a team, rather than just a workforce. Getting familiar with the key HR considerations before you pursue growth is important to avoid having to shell out to put things right, further down the road.

With 35.7% of SME owners thinking a competitive salary is the best way to attract and retain staff, the deck can seem stacked in favour of larger organisations that benefit from lower interest rates due to their size. But there are a number of ways to get beyond these challenges and get more from less.

Attracting, training and retaining the right talent

There are a whole host of internal and external barriers that make attracting and retaining key talent a challenge for SMEs. A good way to attack this is to develop some robust policies. The main issues revolve around budget, but thankfully, the image of the small business is changing.

The risk of your newly-trained staff leaving to join a larger organisation before you see a return on investment is real, but there are things you can do to minimise that risk. Millennials, in particular, are looking for more than money, giving you the opportunity to position your company as an attractive place to work. As Chris Rhodes, partner at performance improvement specialists Accelerus, puts it, owners need “an innovative recruitment policy that is capable of attracting and retaining the best possible talent”. To make a start consider the following steps.

Place a lot of emphasis on the team you’re building and the culture you’re looking to cultivate in the future. Look for more than just technical skills at the interview stage – try and find someone with similar values who will feel like a good team fit.

Real, hands-on experience is something SMEs and start-ups can offer early on. Plan projects in a way that encourages participation from more junior members. Utilising older staff members’ experience can help you to provide training and nurture engagement at the same time.

Things like company culture and flexible working have come to play an increasingly large part in how much employees invest in their workplace. The shift in focus away from competitive salaries alone also frees up funds to focus on the development of your team.

This kind of on-the-job staff development is one of the key ways to keep training costs low. Still, there will be times when training means your staff aren’t working. That’s where outside help comes in.

Chris encourages SME business owners to “ensure that the appropriate internal and/or external expertise is in place to develop and maintain the appropriate policies and processes to conform to legislative requirements.” When looking for ideas for an effective training framework, and a guide to the kind of HR policies that will support your growth plan, Investors in People have a range of resources specifically designed for small businesses.

There may be a range of training initiatives depending on your sector, but be specific. Adopt and fully commit to one choice. Training programmes should be selected for their suitability. You should be seeking to fill a need rather than to use up budget. You may not have the funds for lavish rewards, but recognition is a large element of nurturing a fulfilled workforce that will thrive as your business does.


The moment you start hiring, you’re a line manager with additional legal responsibilities. Be prepared for this.

While your new team members get up to speed on the ‘ins and outs’ of their new jobs, you need to be ready to pay them on time, with the correct tax and National Insurance deductions.

1. Managing your payroll in-house is one option. You may already be doing this. Consider whether your current payroll officer will need additional support as you grow in numbers.

2. Another option is to outsource to your accountant. If you take this route remember that someone in your organisation needs to stay on top of your staff as they join and leave your company.

3. There are payroll systems that can reduce the administrative strain. They’ll calculate deductions, notify HMRC where necessary and help with printing things like payslips, p45s and p60s.

4. You can also opt for a SaaS solution. There are a few products available on the market, some will handle nearly every HR consideration, but usually for a subscription fee. They’re a popular choice among the start-up community in particular.

The most important consideration is which is the most cost-effective solution that will meet your business needs.

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