HR · 11 September 2017

Trade body urges government to invest £13m in HR support for small firms

Face-to-face HR support is seen as a crucial supplement to online advice
Face-to-face HR support is seen as a crucial supplement to online advice

The Chartered Institute of Personnel and Development (CIPD), the trade body for HR professionals, has called on the government to invest more in HR support for small businesses.

The call comes after the CIPD evaluated the results of its year-long “People Skills” initiative, and found that an additional £13m a year could make a significant difference in terms of unlocking UK productivity.

The People Skills programme, which ran from July 2015 to October 2016, gave up to two days of free HR support to small business owners in three areas of the country – Hackney, Stoke-on-Trent and Glasgow.

Through the initiative, business owners were able to benefit from face-to-face advice with a CIPD agent, group training events for staff, a telephone helpline and online guides and information.

According to the CIPD, although the support provided by the People Skills initiative was basic, there was evidence to suggest it provided a solid platform for boosting workplace productivity in the 400 small businesses it helped in total.

Analysis of the programme revealed that by establishing fundamental employer requirements, such as workers’ contract terms and job descriptions, owners were more likely to report that their firm was ahead of competitors in terms of workplace relations, worker productivity and overall financial performance.

Commenting on the success of the People Skills initiative, head of public policy at the CIPD, Ben Willmott, said: “If policy makers are serious about addressing the UK’s long-standing productivity deficit – particularly among the nearly 1.3m small businesses that employ between one and 50 people – then they have to start seriously thinking about how to improve management quality.

“We calculate that about £40m from the government’s National Productivity Investment Fund would support the £13m annual cost of running a People Skills-type service across all 38 Local Enterprise Partnerships in England for three years and could revolutionise the quality of business support for small firms.”

A key finding of the CIPD’s evaluation was that online HR support for small businesses was mostly inadequate unless backed up by personalised advice, with many owners citing face-to-face help as very valuable.

Welcoming the CIPD’s recommendations, Gemma Tumelty, managing director at The HR Dept – a franchise providing HR services to small firms around the UK – said that growth amongst small businesses had been hampered for many years due to lack of awareness of the importance of HR.

She added: “While the principles of good HR may be universal, every business is different and online, generic or call centre model services can never produce the same results as highly qualified expert support.

“Only a fraction of the 1.3m firms in this country which employ between one and 49 people access high quality local HR services to support their business ambition.”

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.