CIPD: £13m a year required to improve SME productivity

Tuesday 19 September 2017

Some £13 million a year is required in order to improve the workplace productivity of small businesses, a new study has suggested. 

Research from the Chartered Institute for Personnel and Development (CIPD), with support from JP Morgan, found that online business support is inadequate unless it is boosted by personalised advice and support. 

As well as this, the findings showed that face-to-face advice was valued by small business owners. It was also recommended that fragmented business support provided at a local level should be rationalised in order to prevent confusion among small and medium-sized enterprises (SMEs).

The study suggests that policymakers should reconsider how they encourage SMEs to employ and train young people. Findings show that many businesses do not have the interest or capabilities to upskill employees. 

As well as this, the CIPD calls for government investment to be made in skills to provide better business support around people management capabilities. It believes that, by doing this, small businesses will have more confidence and abilities to support young people in work.

Ben Willmott, CIPD head of public policy, said: “People Skills shows the potential benefits of targeted investment to improve small firms’ capability around the management of people through co-ordinated high-quality, locally-delivered business support via channels such as Local Enterprise Partnerships, chambers of commerce and local authorities.”

Mr Willmott went on to say that, if policymakers want to address Britain’s productivity deficit, they must consider how to improve management quality. 

He added that £40 million from the government’s National Productivity Investment Fund would provide enough support for the £13m annual cost of running a People Skills-esque service. 

Hang Ho, EMEA head of the JP Morgan Chase Foundation, also commented on the plans, noting that the report shows the importance of using basic HR practices to help small businesses.

She added that the research shows there is a genuine need for better HR support among SMEs. 

While small businesses have plenty of day-to-day responsibilities to keep in mind, taxation is one area where it is easy for mistakes to be made. 

Rather than trying to understand a complicated new field, startup owners should instead consider hiring a freelancer and contractor accountant to take care of the duties. 

The experts will make sure companies do not suffer significant fines or reputational damage, allowing owners to instead focus their time and resources on other areas of their company. 

By Victoria McDonnell

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