Proven: the business benefits of effective HR

03 November 2017

Accounting for almost half of business employment and turnover, small and medium-sized enterprises (SMEs) are the backbone of the UK economy and we champion them.

However, a lack of time, resource and expertise prevents them from developing their people management skills and this is a barrier to productivity, according to research by the CIPD and J.P. Morgan.

The research

By offering SMEs  employment and people management advice on tap, People Skills were able to run a 12 month pilot programme to evaluate the benefits of providing SMEs with HR support and advice.

The reasoning

Andy Heldane, Chief Economist, hit the nail on the head with his analogy: “As Olympic athletes have shown, marginal improvements accumulated over time can deliver world-beating performances. Applying those marginal gains to the population of UK companies could significantly improve UK living standards, even if those are harder to measure than gold medals.”

The outcome

After 10 months of receiving the service, owner-managers were more likely to say their business is “better or much better than similar firms in their sector, on measures of workplace relations, labour productivity and financial performance.”

In laymen’s terms, that means greater camaraderie, output and revenue within and for your business. What’s not to like?

Further findings

Almost all the SMEs who benefitted from the People Skills’ programme said that it had a “significant impact” on their business.

For things like contracts of employment and legal compliance, respondents said they went from “knee-jerk and chaotic”, “not knowing what we’re doing” and “finding our feet”, to “tightened up”, being “on a secure footing”, “ticking the right boxes” and “having a suit of armour”. In fact, many phrased the HR intervention as “an absolute life saver.”

Transformational areas, like performance management and workplace development, received equally positive feedback too. SMEs that implemented new HR systems said they “enabled better dialogue”, “more focused working” and “more structured identification of development needs.”

The bottom line

Simply put, the HR help provided freed up time and helped drive increased productivity. Instead of running around putting out problems, employers were able to spend more time to doing what they love: running and growing their business!

The backing

This study isn’t the first of its kind. Comfortingly, its findings are consistent with work carried out by the Department of Trade and Industry (DTI) over a decade ago.

In addition, there’s a sea of studies that show positive relationships between HR practices and SME performance. In fact, some studies have shown that solid HR practices are not only linked to high performance, but that they precede it.

If you fancy checking out CIPD and J.P. Morgan’s comprehensive coverage of the study’s findings, head here.

What we say

Linda Jodrell, our HR Director, said: “Any good HR professional worth their salt proves the business benefits of effective HR day in and day out.  If you have it, you rely on it and take it for granted.  If you don’t have it, then you don’t know what you’re missing.”

Fancy getting in on the action?

Our industry-leading HR & Employment Law experts are just that – experts. Whatever the sector or size of your business, we can help you with everything from contracts of employment and policies, to employee engagement and performance management.

Get in touch with us on 0345 844 1111 or hello@citation.co.uk to start reaping the benefits of rock solid HR practices today.

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