The Importance of a Robust People Plan for the SME / SMB… 

Small and medium-sized enterprises (SMEs / SMBs) are the backbone of the economy, accounting for the majority of businesses in most countries. In the UK, there are currently 5.5million SME’s and account for three-fifths of the employment and around half of turnover in the UK private sector. The latest statistics for the USA are that there are 33million SME’s, totalling over 90% of the overall business population, generating a significant amount of employment. However, SMEs often face challenges in attracting and retaining top talent, which can hinder their growth.

SME’s are growing… A recent report prepared by the British Business Bank Small Equity Tracker showed in the UK, equity investment in the UK’s smaller businesses increased by 88% in 2021 to £18.1bn compared to the previous year, the highest yearly amount since the data series began in 2011. The strong momentum continued into 2022, with £7.6bn of equity investment reaching smaller businesses in Q1, the highest amount invested in a single quarter at nearly double that of the £4.3bn in Q1 2021. Investment in UK tech companies has continued to grow rapidly in the past five years, rising to £8.2bn in 2021, up from £4.1bn the previous year.

So how can a robust people plan support this growth?

A robust people plan can help SMEs overcome challenges such as attracting and retaining the talent needed to achieve their growth goals. It is also essential to link the people plan to the corporate strategy, ensuring that your people (your most important asset) can support the growth.

A people plan is a strategic document that outlines the organisation’s goals for its workforce, as well as the strategies for achieving those goals. It should include the following elements:

  • A workforce analysis: This should identify the organisation’s current workforce, including its skills, knowledge, and experience. It should also identify any gaps in the workforce that need to be filled.
  • A talent acquisition strategy: This should outline the organisation’s plans for attracting and recruiting top talent.
  • A talent development strategy: This should outline the organisation’s plans for developing the skills and knowledge of its workforce. It should include a variety of training and development opportunities, such as management and leadership development, on-the-job training, and coaching and mentoring.
  • A compensation and benefits strategy: This should outline the organisation’s plans for compensating and rewarding its workforce. It should include a competitive salary and benefits package, as well as opportunities for advancement.
  • A performance management strategy: This should outline the organisation’s plans for evaluating the performance of its workforce. It should include clear performance goals and expectations, as well as regular feedback and coaching.

SMEs that do not have a people plan in place are at risk of the following:

  •  Difficulty attracting and retaining top talent: Without a clear plan for attracting and retaining talent, SMEs may find it difficult to compete with larger organisations that can offer more attractive compensation and benefits packages.
  •  Low employee productivity: When employees are not happy or engaged, they are less productive. This can lead to lost productivity and revenue.
  •  High turnover costs: The cost of replacing an employee can be significant, particularly for a small business, including the cost of recruiting, hiring, and training a new employee.
  •  Lack of innovation: A workforce that is not diverse and creative may lack the ability to innovate. This can hinder the organisation’s ability to compete in the marketplace.

In summary, SMEs that want to achieve their growth and scale up goals need to have a robust people plan in place. A well-designed people plan can help to attract and retain top talent, improve employee productivity, reduce costs, and increase innovation.

If you’re an Entrepreneur / SMB leader, perhaps considering or in your first or second round of funding, and want to have a chat to discuss how BluZinc HR Consultancy Services can help you, please email or book straight into Jonathan’s calendar for a meeting or call with him and Stephanie!

Read here for the specific types of projects Stephanie has prior achievements in.

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