Small and medium sized businesses (SMBs) comprise the ‘engine room’ of the UK’s business economy. Recent figures from the Department of Business Skills and Innovation underline their importance and reveal  that SMBs make up 99% of all businesses and account for 59% of all private sector employment and 49% of all private sector turnover, so there’s nothing ‘small’ about their role in contributing to the economic recovery.

It’s also encouraging to see the number of UK SMBs have grown hugely in the past decade, rising from 3.5 million in the UK in 2000 to 4.5 million in 2011, according to the Federation of Small Businesses.

Alongside this, The Voice of Small Business Index, found that 15 per cent of SMBs have increased their staff numbers in the third quarter of 2013. This is the highest figure reported since the Index began in 2010 and mirrors recent improvement in labour market figures.

HRs role in SMBs success

All this points towards a positive outlook for SMBs, who have been hit especially hard during the recent recession. Often lacking access to cash and capital, they are also more likely to suffer from a lack of management experience and expertise that can be found in larger enterprises to help weather tough times. Many have been forced into operating in survival mode, and workforce issues often go on the backburner as a result.

If SMBs are to step-up and fulfil the role assigned to them, they need to change; they need to stop thinking about just surviving and start to innovate and grow while still squeezing the maximum benefit from every available resource at their disposal. This is why the role of the HR manager is vitally important to the businesses success.

Move from survival to thriving mode

Regardless of size or industry, a focus on the short term can be catastrophic for a business trying to grow – it’s the old adage “failing to plan is planning to fail” – but failure to plan is a classic pitfall for SMBs.

It’s easy to see why so many businesses fail to look ahead adequately. HR professionals at SMBs often have responsibility for more than once aspect of the business and it can be a challenge to set aside time to plan as it often means time spent away from their day job.

Leadership and employee engagement

Given the close-knit nature of SMB teams, effective communication is fundamental to success. It’s no secret that an open and collaborative business environment automatically leads to better behaviour in the workforce and greater employee engagement.

Employee engagement is something that many HR managers are currently investigating and working closely with the management team to achieve. If employees are engaged and feel they are working in a culture of fairness, transparency, with good two-way communication and that they are involved in business decisions then they are likely to make an extra effort and believe that they can make a real difference to the long-term business goals.

Staffing and people management issues are very often the central and chief concern of HR professionals at SMBs, be it managing talent and giving staff the right opportunities, attracting and retaining the right staff into the organisation or simply the day-to-day issues of keeping staff productive and engaged.

Where next?

As Europe slowly recovers from recession, many small businesses are searching for ways to grow. For HR managers, effective employee management is essential to this growth and a robust plan that considers all aspects of the business and engenders an open and collaborative working environment.

HR managers must cultivate a working environment where employees feel valued and involved in the business’ success is a good place to start and should be taken serious by SMB owners looking to thrive in today’s economic climate.

Neil Pickering marketing manager at Kronos UK