HR for SMEs: Why is it important?

In small to medium-sized businesses, day-to-day HR tasks can often be a headache. Trying to decipher those dreaded holiday spreadsheets or stay on top of those employee expenses can all become an unwelcome hassle that distracts from what you actually do.

Fortunately, we’ve developed HR Planner, an HR management tool specifically created for the needs of SMEs. It makes managing your HR commitments a breeze.

And if you were wondering exactly why HR plays such an important role in the world of an SME, read on…


One of the most important HR roles is to ensure compliance with complex and ever-changing employment laws. This is critical for safeguarding staff and avoiding costly legal disputes.

HR is responsible for everything from risk management to health and safety, as well as ensuring equality in the workplace. This includes providing a code of conduct employee handbook to avoid costly litigation. Many HR teams are also responsible for recruitment and actively conducting interviews without bias, to ensure diversity and prevent discrimination.

Creating a positive work environment

HR plays a key role in making your company a place where people want to work. This includes implementing a strategy to develop a positive, supportive workspace environment. Sharing, demonstrating and reinforcing company values and positive internal communications is a great way to do this.

Supporting employees will also be a core focus, from helping new employees settle in, to acting as a mediator to resolve any workplace conflicts. Initiating buddy schemes, where more experienced colleagues support new members of staff, is a very positive step to ensuring workplace happiness.

Attract top talent

Choosing the right candidates is critical for the overall success of your company – but it

takes more time than you think!

Having already done a good job of creating a company culture future employees want to be a part of, HR will also need to be able to negotiate employee contracts. Having a strong understanding of regional variations in salaries and what is most important to the candidate, for instance flexible working hours, could be what it takes to win them over.

Maintain employee wellbeing and engagement

After hiring the best candidate, the next crucial role for HR is to retain them!

We’ve already touched on how important a good workplace environment is, but ensuring employee wellbeing is also crucial for employee retention and motivation. HR can manage diaries and share internal communications to set up mental health days, run wellbeing workshops and provide information about local support groups.

An important role is to address any factors that may contribute to employee dissatisfaction, which can be done by asking staff to complete pulse surveys and carrying out exit interviews to prevent any recurring issues.

Employee benefits

Staff should feel valued at work, so HR will need to offer a competitive and comprehensive benefits package to attract and retain top talent. Your team can ensure this by working with senior leadership teams to establish incentives to encourage productivity and increase staff engagement. This may involve starting from scratch and researching budget friendly options, or updating a pre-existing benefits package.

Part of an HR role can be working with payroll and ensuring the correct and timely allocation of benefits (for example disability benefits), as well as controlling budget and spending for various departments to contribute to the business’ success.

Employee development and training

Figures show that great onboarding leads 68% of employees to stay at companies for over three years. Plus, businesses with standardised onboarding experience 50% higher employee productivity.

HR is crucial in managing employee development and training, including providing opportunities for skill development and career advancement. Getting your department involved in upskilling will ensure everyone has the same understanding of core parts of their role, which will help to improve their overall productivity and efficiency.

Personal development for staff is a great way to boost confidence and happiness, giving them a sense of personal success and achievement. A good training and development programme will also build your reputation as an excellent employer.

Performance reviews and disciplinary action

HR departments commonly handle performance management, including conducting annual reviews, setting performance goals, performance evaluations and identifying any training requirements. They can also take responsibility of addressing performance issues and issuing disciplinary action where required.

Ensure the company runs smoothly

By taking on a variety of administrative tasks, HR teams help to maintain files efficiently to ensure your company runs smoothly.

This includes organising flexible working schedules and keeping on track of absences, spotting any colleagues with regular absences that may need extra support. As well as managing leave, they also monitor holiday allowances and arrange cover to prevent staff shortages.

Save time and money managing your HR

Like the sound of HR software without the headaches? We developed HR Planner specifically for SMEs to help save you time and money. We do this through our:

  • Industry-leading leave and absence management – Easily arrange cover where required
  • Insightful reports – Monitor regular absences to identify staff that might be struggling
  • Documents module – Publish staff handbooks and company policies, as well as helpful resources for employees
  • Skills system – Keep track of qualifications and ensure staff certificates are up to date
  • Unlimited employee data fields – Collect all the information you need
  • Full API management – Integrate HR Planner into your company’s systems

To experience the benefits for yourself, arrange a free demo with our team on 01252 636070 or email