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HR Essentials – in more ways than one.

9 August 2021

We all know that the pandemic and prolonged lockdown have created a very difficult situation for businesses and the impact is still being felt now.  Many staff have been furloughed, attitudes to home working and office working have changed, and there is another challenge as order books get filled and businesses look for extra capacity to meet demand during a shortage of staff and materials in the supply chain.  Here, HR consultant, Sarah Loates shares her views on the current situation and suggests how SME management teams and business owners might respond to secure a positive future. 

What are your observations about the main staff issues right now?

We talk about business issues in terms of what’s causing our clients “HR pain” and we’re finding a lot of HR pain right now.  A lot of it is coming from supporting employees back from furlough and getting them refocussed.  A lot of individuals are still reluctant to come back into the workplace because they are unsure what to expect and are comfortable with home working.  Many organisations are grappling with introducing hybrid working which is a mix of home and office-based work.  As a concept there’s quite a lot to it that managers have to think about – things like maintaining team cohesion, establishing and maintaining trust that your staff can work effectively work from home.

You’ve then got the line manager capability in terms of them being equipped to deal with remote workers and then you’ve got all the legal and practical aspects in terms of any changes to the contract – is it a flexible working request? What about the health and safety aspects – do I need to do a risk assessment?  Display Screen Equipment rules still apply and then you’ve got all of the data protection, confidentiality, GDPR aspects and who pays for the equipment.

Negative impacts of Covid on staff

The thing we’re picking up is that in many areas there’s a general workforce malaise, employees are exhausted after the challenges of the pandemic, be it personal or work-related and there are many who are finding it more difficult to be excited, engaged and forward looking.  Building on that, in general, from an employee engagement perspective, there are some unhappy employees in the workplace at the moment.

We’re finding increased numbers of bullying claims, as employee relations deteriorate and particularly when managers are trying to performance manage individuals because performance has declined.  There may however be many underlying issues for this. people reassessing what they want from life; they might have extra caring responsibilities; they might be sick themselves.

How to prepare for the end of furlough 

A looming issue that we have is the end of the furlough scheme at the end of September and that from July 2021 through August 2021 employers have been contributing greater percentages to the wages bill. As an employer if you are unable to return your employees to their former roles on their previous contractual hours, you should be starting to plan to restructure the work or, sadly, to plan for redundancies. A key aspect of redundancy is planning, and this is also vital to avoid the need for redundancies.  Aside from the practical aspects there is a plethora of employment law, to trip up employers, even if they have the best intentions.  Careful planning and consultation with your workforce is key.

What about recruitment?

Recruitment is horrendous at the moment, to be honest.  We’re in what we call a tight labour market so there’s overdemand and lack of supply particularly in hospitality but also finance, IT, web design and creative. There is also wage inflation to attract desirable candidates – and that isn’t sustainable in the long term for businesses.  What employers are now having to think about is how to attract that top talent.  The HR magazine People Management actually had a jokey reference to this on its cover offering a ‘free speedboat for every successful candidate recruited’ because it’s a national issue.

Local businesses need to think about creative ways to stand out – that could be offering golden hellos – cash when you join; rewards for when you pass your probation period, or getting across the culture of the business e.g. by making a video with your team; and so on.

As part of our session we look at how to attract the right candidates, how to stand out from the crowd and how to deliver a good experience for your candidates as you take them through the selection process and through to onboarding.

What are the HR challenges facing employers that didn’t shut down?

The biggest challenge for them is burnout and their employee well-being.  They also have to manage the dynamic I mentioned between those who have been on furlough and those who have remained working. One problem is that employees returning from furlough are entitled to their holiday entitlement and that can create a feeling of unfairness for those employees who have worked throughout lockdown. So managers need to manage holiday entitlement sensibly.

The majority of companies in Leicestershire are SMEs, in advanced manufacturing and other sectors, who don’t typically have professional HR staff in their team.  What staff challenges do they face?

First of all, they usually call HR in too late, so there are fire-fighting problems to deal with.  The other thing I’ve seen is the focus on technical rather than leadership skills.  Many of our clients are from an engineering and manufacturing background and they’re technically very capable but in terms of people management skills, this is an area for development.

A third issue that we find in these types of businesses is a thing called the Peter Principle where people are promoted above and beyond their competence.  They’re promoted on their technical ability as opposed to their management ability. What these employers should do is put these technically able people on a specialist career path where they don’t manage people and get a people manager in who’s really good at motivating and performance managing teams.  That’s something that we see repeated time and time again.

How willing are managers in these SMEs to address these problems? 

The people that come on the programme tend to be the business owners or the people who’ve been given responsibility for HR though they’re not from an HR background.  We get a lot of Finance managers or Office managers who’ve had HR put into their jobs and that’s the reality of a small business.

What they do know is that people management causes them a lot of anxiety and stress because they’re having to do something that is out of their comfort zone.  I had many conversations in manufacturing, particularly in the early part of the pandemic about how this inability to address HR issues affects a business’ ability to deliver.

For example, if an SME loses a large contract as part of a supply chain, they need to take action to keep the business viable.  It’s never pleasant dealing with difficult HR issues.  SME owners don’t know what they can say and what they can’t and that’s frightening for them.  What this course does is cover some of the legislative framework and we also look at lots of practical examples from real life to see how these can get resolved.

We also look at the different types of employees you can have in a team and how to spot which ones might need careful management.  Often teams have a ‘mood hoover’ who brings the rest of the team down, so we look at how to get them back on track with some constructive conversations.

Our sessions are very interactive (as well as confidential) so the more people we get on them, the better they are because people realise that they’re not the only ones going through these challenges.  I even share some of the mistakes I made early on running my business – we’ve all made them.

Do people go away from the course saying that they’re going to recommend recruiting an HR professional or do they feel they’ve learned enough to look after it themselves?

A bit of both but most of them go back looking to implement some changes themselves and we give them lots of practical support to help them achieve that.  Somebody at our most recent session was talking about the challenges of recruiting when you’re an SME so we talked about the things that a smaller business can offer, which a larger business can’t like flexibility, autonomy, flat management structure and fast decision making etc.  We also discussed ‘onboarding’ or induction and I let them have our checklist for new starters. We always tailor these sessions to what our clients need.

In your experience what is the role of leadership in SMEs and how does it impact on staff?

I have a lot of conversations with business leaders where I talk about the famous Peter Drucker quote “in order to manage the energy of others, you have to manage your own energy”.  So, I talk about how they can support themselves and create that space to think.  A lot of the time, issues arise because they’re working IN the business and not ON it.  A good HR professional can help them achieve the latter.


Book now to attend Sarah’s course: HR Essentials for SMEs Part 1 on 11 August 10.00am-13.00pm and part 2 which is on 18 August 14.00pm-17.00pm