The Chartered Institute of Personnel and Development (CIPD) have stated that - for business owners - talking to HR professionals can be enlightening.

More than half the UK’s employment and turnover is comprised of small and medium-sized enterprises (SMEs) – but at the recent meeting of the business, energy and industrial strategy (BEIS) committee, it was suggested that there were a number of barriers preventing the achievement of better productivity.

The scope of the inquiry was to look at what the Government can do to help small businesses improve their productivity, particularly through access to management training; the latest best business practices; and information on the availability of financial support.

In addition, the enquiry would also look at the subject of late payments to small suppliers and study the role of the new Small Business Commissioner in tackling deliberate poor treatment by major companies.

In its evidence to the enquiry, the CIPD argued that the majority of SMEs required constant external support to improve their management and development capabilities – and added that the government should be prepared to offer this.

Ben Willmott, Head of Public Policy at the CIPD told People Management:

“Many owner-managers of SMEs have very limited experience around managing people and, if you ask them about the challenges facing their organisations and businesses, they won’t say they’ve got people management issues, they will talk about the business challenges. But if they talk to an HR consultant who recognises these challenges as people issues, they can have that ‘eureka’ moment. This is why a relationship with an HR consultant can, for SMEs, be as important as a relationship with an external accountant.” 

Further evidence submitted repeated the suggestion made by the CIPD that HR managers should be given additional skills, but also stressing the requirement for a system that accommodates the miscellaneous needs of SMEs.

Professor Mike Wright, fellow of the British Academy of Management stated:

“If we are to improve management capability, it is important to recognise that not all SMEs are the same and they require training and support targeted to their specific needs.” 

He added:

“There is a need to develop support mechanisms that improve the high-level management skills of family-owned SMEs, and enhance their understanding of governance options through better training.” 

The BEIS Committee has published submissions - in writing - from a range of businesses and organisations including Zurich Insurance; the Rail Supply Group and the CIPD.  At the beginning of June, they will hear from SMEs and training providers with witnesses including representatives from the CIPD; Goldman Sachs; Open University; Monster Group UK and the Federation of Small Businesses.

The Chair of the Business, Energy and Industrial Strategy Committee - Rachel Reeves MP said:

"SMEs make up more than 99% of private businesses and account for more than half of turnover and employment in the UK. Small businesses are the lifeblood of our economy and it's vital that that we get the business support right to boost innovation and the productivity of our SMEs. The written evidence we've received highlights a range of issues which hinder small businesses and damage their productivity, but two main themes emerge - the often crippling impact of late payments by major companies and the lack of effective management training.
 
The devastating problems for small firms posed by delayed payments by large suppliers were highlighted by the recent collapse of Carillion, which left unpaid debts running in to the millions of pounds. We've questioned the Small Business Commissioner on what is being done to tackle the poor treatment of small and medium-sized businesses and we shall continue to monitor action in this area during this inquiry.

In our evidence hearing on Tuesday, we will focus on the issue of management training, hearing from SMEs and from training providers about some of the issues in providing effective management training to help develop leadership in SMEs.”