SMEs' Attention to HR Means Business Suffers - Croner Research

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01 Feb 2010

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London, 1 February 2010 – With small businesses already under increased pressure to perform their way out of the recession, SME organisations have revealed that crucial areas such as new business development and customer service are suffering as a result of time spent managing HR issues. According to research by Croner, the UK's leading provider of workplace information and consultancy services, well over half (60%) of those in SME organisations have no formal HR training. These include CEOs, MDs, finance directors, operations directors, line managers and PA/secretaries – and even HR managers. But one in 10 are spending up to 15 hours or two days a week on HR. Dealing with red tape and regulations (40%) and health & safety (19%) were cited as the most time-consuming activities. Unsurprisingly, spending so much time on these necessary activities - which also include managing employee performance, monitoring absenteeism and logging holiday leave - is having a negative effect on businesses. Three quarters of CEOs and MDs cite new business development and customer service as the most likely areas to suffer. "Last year was one of the toughest for businesses with almost 27,000 companies going under as a result of the recession," says Richard Smith, Head of Service Development at Croner. "It is obviously important that all companies adhere to HR processes but not at the expense of business survival and expansion. SMEs need to look at new ways of simplifying HR and other compliance activities and freeing key people to attend to the core responsibilities of their job." The Croner survey reveals that the effort put into managing employees is not adding to confidence, with 26% of people managing HR in SMEs saying they are not sure whether they are taking the right steps. They are are concerned that, if they get it wrong, the company could face an employment tribunal claim. A quarter of respondents admit to having no external HR support while one in 10 rely on a trawl of the internet for help – which is often an unproductive exercise. To help SMEs reduce the time spent complying with business regulations, Croner has launched Croner Simplify www.croner.co.uk/simplify, a proactive business compliance solution that combines dedicated HR consultancy support with a secure, easy to use online service. Businesses benefit from expert support on HR, health and safety, financial administration and other commercial legal queries. Croner Simplify enables employee records to be stored centrally, replacing the need for paperwork and providing an audit trail of actions and documents. It includes a traffic light warning system, highlighting red for risk, amber for action required and green for OK - alerting managers to any immediate actions, upcoming deadlines and potential problems. It also enables a dedicated Croner consultant to proactively help them deal with situations before they become a time-consuming and costly problem. Croner's Richard Smith says: "Too many key people in SMEs end up spending a lot of time, effort and money sorting out problems, often because they are still relying on paper files (31%) to manage employee records, or because they are not aware of the pitfalls of particular actions. With Croner Simplify, businesses can streamline administration and get the practical guidance they need to minimise the risk of issues developing."

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