10 Great HR Tips for SMEs

Written on Thursday, 04 January 2018


If you own your own business, having a clear, well thought out HR policy is vital if you are to avoid being exposed to ever greater risk as you expand.

Human Resources is not just a nice-to-have; it’s the operational face of a legal framework that protects workers rights and safety and protects you from spurious legal claims about pay and conditions. Employment legislation requires you to take specified measures to protect employee welfare in a range of areas and your HR policy, person or team is the way you translate that into your business

But a good HR set-up adds real value to your business and helps your employees maximise both their benefit to the business and its benefit to them.

In an SME the entrepreneur/owner is usually the HR person too, at least in the early years. Our handy HR tips should help you get your HR policy right.

1. Policy Framework

If you don’t have one you need to set up and write down your HR policies as soon as possible. These should cover things like absenteeism, employee evaluation and performance management, basic expectations of all employees plus any statutory terms that need to be included such as annual leave.

It should also include anti-discrimination and anti-harassment and bullying policies.

It’s common to put these into an Employee Handbook that you give to new starters. Encourage them to read this, in doing so you will ensure they know what they are entitled to, your expectations of them and, if things go wrong, they won’t be able to claim ignorance of your policy.

2. Recruiting

It’s vital you know what your aims and goals are before you hire anyone for a role. You need to make sure the contract or employment terms you plan to offer meet or exceed all necessary legal minimums and that there are no clauses in there that breach what you can ask employees to do.

As a small business, you won’t necessarily have an HR team, but you’ll almost certainly have a solicitor you use. Speak to them about sense-checking your standard employment contract to ensure it is compliant with employment law.

You also need to take care not to discriminate. If challenged you must be able to demonstrate that any hiring decision is not influenced by race, gender, disability, sexual orientation or identity, religion, marital status, age or pregnancy.

3. Job descriptions

Getting these right is very important as they dictate what you expect your employees to do. Ask them to perform a task which is a major departure from this and they can refuse. Job descriptions can’t be too vague, however. They must detail the roles and responsibilities of an employee accurately enough that they understand exactly what is expected of them.

4. Statutory rights

There are many statutory employee rights which are constantly evolving. We focus on some key ones here but you need to ensure you comply with all of them or you could face hefty fines and certain defeat at any future employment tribunals.

Discrimination, for instance, is not just a consideration during the recruitment phase. You need to take care not to put rules in place which, directly or indirectly, disadvantage a group protected under discrimination legislation. For example, you can’t implement rules for married employees that do not apply to those in civil partnerships.

Other rules you need to abide by include:

  • Maternity and paternity rights - minimum statutory pay conditions, leave requirements and the right to shared leave consideration - where a mother and father can trade their leave with each other, even between businesses, to extend their post-birth absence.
  • Working time - currently, with few exceptions, employees should not work more than 48 hours a week, taken as an average over 17 weeks. Some businesses do ask employees to consider signing a waiver that allows them to impose longer hours when required, but you cannot make employees sign it.
  • Annual leave - You must offer at least 28 days paid holiday (including bank holidays) to full-time staff.

This is not in any way an exhaustive list. For a comprehensive overview of statutory rights for employees visit Citizens Advice.

5. Compensation and Benefits

Employees need salaries. It’s your job to work out how much you should be paying for the experience and skills you need, what you can pay and what is realistic to be able to pay in future. You don’t have to pay the full market rate, but the calibre of candidate you attract will be affected by the salary level you offer initially. You also need to be mindful of market trends in your industry. If you need to add new skills, you need to understand what that will cost and weigh-up the value to your business.

One way some companies sweeten the deal for candidates is to offer benefits, whether practical, like healthcare, or fun, like duvet days and free breakfasts.

6. Safety

From the construction site to the office, Health and Safety is a serious HR issue. You can’t hire employees and force them to work in dangerous or hazardous environments. Some careers are, of course, inherently hazardous and there are legal provisions for those. For the most part, you simply need to ensure that all your equipment, e.g; computers, is regularly safety tested, that there are no obvious hazards in your office and that you have qualified first aiders, first aid equipment and an incident/near-miss log-book on site to ensure individuals can report problems.

7. Induction

Once you’ve recruited a new team member, you need to have a process for introducing them to the company and helping them understand the tools and processes they need to perform their role. Everything from making sure they have the right computer (and it is set up for them), before they arrive on day one to explaining your business philosophy and goals. Don’t forget the important things like where to get hot drinks! Your induction needs to be structured and consistent. Inductions can be tailored to job roles or levels, but should all have the same foundation.

It’s not just a fluffy idea. Induction is the most efficient way to introduce a new team member to the people they will work with and need help from when problem-solving as well as ensuring they understand how the business operates and are not forced to waste time hunting for answers to basic questions. Ideally it should ease a new starter in over a couple of days.

8. Social media

The challenge of the 21st century - how to prevent social media causing problems for your business.

The first thing to do is be clear in your policy. If you don’t want employees using social media at all during working hours, spell that out in writing. Detail expectations of use of social media too. Employees who have posted unpleasant things in the past, even on private accounts on Twitter, Facebook and such, have lost their jobs when those messages were discovered. Sometimes employers see them as a reflection on the company, other times they see them as a reflection of the employee, but social media can be used as grounds for dismissal. You must write your policy down clearly, however, including the process of disciplinary action that will be taken.

9. Employee Satisfaction

For most employees, starting a new job is an opportunity for them to progress and learn new skills. One of the non-statutory responsibilities you need to honour is a commitment to training and career progression. With a clear, challenging, attainable improvement and promotion pathway, you will retain staff and avoid the costs of hiring a new member of staff who requires basic training. Set achievement targets, make the right training courses available and speak to your employees, find out what training they feel they need. At the end of it all, review their progress and once they hit the right threshold, ensure the door is open for them to move up to the next level.

10. Master the difficult conversations

A critical part of a successful HR policy is performance management. One of the most difficult skills to master is how to have a difficult yet constructive conversation with an employee to address performance issues, build enthusiasm and elicit the improvement you desire. This is a skill that many seasoned, successful managers struggle with so your best course of action is to find a trusted mentor. Get them to help you understand how to speak to an employee to address areas of underperformance or concern and how to offer to work with them on a solution. This rare skill will transform how your employees are motivated.


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HR tips, HR advice, SME

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