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HR skills can help support SMB growth
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People management has a vital role to play in driving long-term performance in small and medium-sized enterprises (SMEs), according to a leading human resources body,
In a new report, the Chartered Institute of Personnel and Development (CIPD) has highlighted a number of vital insights for HR practice and strategy which can assist SME growth.
Firstly, the organisation noted that anticipation is key, with readiness and relevance helping to determine success.
"HR must have a deep understanding of the organisation’s context, strategy, vision and values in order to anticipate key stages of growth and transition that may require a shift in HR strategy and practices," the CIPD stated.
It claimed that organisation values and purpose need to be the constant bedrock of the business.
The body said that HR must work hard to preserve the SME leader's founding vision and values by making them vibrantly part of how the organisation and its people work on a day-to-day basis.
"Skilful alignment of people management insight with leaders' aspirations is a critical HR challenge," the CIPD noted.
"While leadership appetite for the more intangible HR issues may be limited in the early days of the business, HR must be confident in using its insight into current people management issues and future challenges to ensure its potential to influence long term performance is not overlooked."
The organisation added that simplicity of structure and purity of process preserves innovation and entrepreneurship, although more processes and structure will be needed as a business grows.
"It is important to find the right balance between structure and fluidity so that agility and entrepreneurial spirit are not stifled or undermined by bureaucracy," the body added.
Next, it said that sustainable growth involves "striking a balance" between preservation and evolution.
Rather than being sentimental about what has always been, it is often necessary to let go of processes or aspects of the organisation's culture that no longer support its vision and priorities, the CIPD added.
HR teams are urged to look beyond immediate operational issues and take the opportunity to lay the organisation’s cultural foundations for the future.
"Process driven responses to challenges as a business grows may only provide short term solutions and miss a golden opportunity to support the longer-term goals of the organisation," it stated.
Dr Jill Miller, research adviser at the CIPD, said SMEs are "vital to the UK economy", but with limited material and financial resources, good people management is fundamental to their long-term performance and growth.
"As an organisation’s workforce grows and the scope of operations changes, particular challenges arise, particularly when it comes to balancing the need for formal systems and processes with the desire to preserve value-creating innovative and entrepreneurial cultures," she added.
"With larger teams, the skills and capabilities of managers become of paramount concern, and maintaining people’s strong engagement with the organisation's purpose and vision becomes more challenging as the distance between the owner/founder and employees increases."
Dr Miller said that whether responsibility for people management rests with the owner/founder, office manager or HR practitioner, it is through anticipating and responding in a timely way to the people management opportunities and challenges presented at different stages of growth that an organisation can achieve competitive advantage.
Posted by John Lynes
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