Red tape is also a problem; 88 percent of respondents think employee law and legislation is far too complex and 63 percent think pay and benefits legislation causes them difficulties. In addition, 72 percent think they spend too much time on HR issues.
These findings could have significant implications for Government plans for job creation and the wider UK economy, with SMEs accounting for 60 percent of private sector employment in the UK.
Jayne Carrington, Managing Director of talent and career management consultancy Right Management, which undertook the research, comments: “We hope the Government’s review into its support for small business doesn’t lose momentum. It is essential that SMEs thrive for the sake of the UK economy. Managing Directors are worried about losing top talent but just over half favour motivating staff through incentives rather than career development. Providing career progression and development opportunities will ensure they retain talent and build a committed and engaged team to drive business growth.”
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Seventy-two percent of MDs think they spend too much time on HR issues and only 53 percent regard the time they spend on HR as a good use of their time.
Carrington says: “This further demonstrates that SMEs are being waylaid by processes and procedure and unable to focus on strengthening their business.”
Maintaining warm relationships with staff is more important to MDs the further north they are. In Scotland, 44 percent said they tend to see staff as friends rather than colleagues. This was followed by 42 percent in the North West, 40 percent in the North East, 36 percent in the Midlands and London and the South East were the least likely to at 28 percent.
Carrington comments: “MDs of SMEs tend to have more of an impact on company culture than MDs of larger organisations. This may explain why staff churn rates are lower in the regions where MDs are more likely to see staff as friends rather than colleagues.”
