SMEs are the best at managing talent, finds government research » SMEInsider

SMEs are the best at managing talent, finds government research

team

Firms often fail miserably to get the best out of employees, with far too much talent wasted by those that plod along without inspiring their staff. But, according to a new report, smaller businesses lead the way.

Commissioned by the UK Commission for Employment Skills (UKCES), the study placed SME directors into one of seven groups: organisers, developers, recruiters, trainers, free riders, plodders and survivors. Nearly a quarter were classed as organisers and developers – the top two categories.

The categories were based on each company’s performance in the following areas: planning, organisation, skills, rewards and autonomy. Factors included whether the business provides a bonus scheme and performance-related pay, task variety and flexible working, annual performance reviews and identifying talent.

The idea was to test the degree to which companies are able to motivate, train and reward employees, and the amount of autonomy each person is given to add value to their workplace.

However, while the high numbers of “best practice” SMEs is great news, the research showed a stark gap between the best firms and the worst. A third of the remaining companies were described as “free riders”, meaning that they scarcely give employees any autonomy at all, while one in 10 were classed as “plodders” – companies that do not meet any of the criteria for creating a high performance workplace at all. Most of these companies operate in the retail and wholesale sectors.

“This research shows big differences in the ways businesses of all sizes make use of the skills of their staff,” said Lesley Giles, deputy director at UKCES. “These findings do raise concerns over the gulf between those nurturing and developing their staff to boost productivity, and those that aren’t,” she added.

“High performance workplaces where employers train their staff so that they become internal experts and then use that expertise will perform better than other firms,” added John Walding, a spokesperson for the Forum of Private Business.

“Micro and small employers have an innate advantage in that the employer knows all his employees. This means the employer can see where help is needed and how far individuals want to take on responsibility for tasks, although not all of them use this advantage.”

 

  • richard harrison

    “The categories were based on each company’s performance in the following areas: planning, organisation, skills, rewards and autonomy. Factors included whether the business provides a bonus scheme and performance-related pay, task variety and flexible working, annual performance reviews and identifying talent.”

    There are a number of assumptions built in to the criteria for judgement of what is good or best practice. E.g provision of a bonus scheme and performance related pay and annual performance reviews. There are very sound reasons why these might not be good or best practice and plenty of research to question their validity. There is no such thing as “best practice”. It infers there is one best way of doing things. It also infers a relatively static approach to quality and improvement. Clearly there isn’t just one way of doing things and businesses need to develop processes and systems that suit them and their people and not copy what may have worked for someone else.