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SMEs at risk through DIY HR and payroll failure

SMEs are the businesses most likely to have key functions carried out by non-experts. And a new report suggests they’re putting themselves at risk.

For most SMEs, tackling time and attendance, HR and payroll in house simply goes with the territory. Often, there’s one overburdened member of staff covering it all. Frequently that someone is the business owner.

If that sounds familiar, then the results of a recent survey by OnePoll commissioned by Jobandtalent will probably ring equally clear.

The survey of 500 SMEs reveals some worrying insights including:

  • Only 37% of small business owners feel that they have a good understanding of regulatory changes and keep up to date with them.
  • 25% believe they do have a good understanding of legislation but don’t keep abreast of changes.
  • 12% feel they have little or no understanding of present employment regulations.

The damaging effect of DIY

James Peck, UK managing director of Jobandtalent, said: “We know that small business owners need to hire great talent to grow, but this research sadly shows that a number of UK small businesses are still taking enormous risks when hiring and managing their staff.”

It’s not hard to see how SMEs end up feeling burdened by duties they don’t fully understand, but failures due to this lack of understanding – and the lack of expert support – are having serious effects.

According to The Pensions Regulator, the number of employers being fined up to £10,000 for non-compliance issues has risen by 300% in 3 just months. Meanwhile, 22% of SME owners say they are spending between 2 and 5 days ‘onboarding’ staff – a process that could take less time and come with reduced risk if they sought a little help.

Reducing the risk via workforce management

That help doesn’t have to be in the form of people. You don’t have to suddenly expend your workforce or your cost base by employing back office staff or outsourcing HR functions. You can still do it yourself – but with the extra help that makes managing your business quicker, simpler and safer.

Here’s an example: you currently spend the best part of a day every month rationalising paper timesheets and putting them on your payroll system. Every month there’s a keying error or two that take forever to find. And every month you run the risk of missing your payroll deadline.

Yet an automated time and attendance system can remove all the pain of payroll. Simple card swipes or hand/finger scans log times in and out, and automatically populate timesheets, which then integrate seamlessly with your payroll system.

You only need to look at our case studies to find businesses who’ve reduced time spent rationalising time and attendance with payroll from a day or more to a couple of hours or less.

Here’s another example: you have three people qualified to drive forklifts. Their licences last 3 years, but 2 are coming up for renewal. The problem is that, in running a business, things like licence renewals are very easy to overlook. As soon as they expire, your business is running the risk of non-compliance failures (or worse). But an integrated workforce management system like Platinum+ will alert you when licences are due to expire, so you stay compliant.

DIY done right

It’s not just time and attendance. And it’s not just HR. A modern workforce management system can help you with everything from absence management trends to job costing, access control to fire roll calls.

So we would argue that for small businesses, DIY isn’t the problem. The problem is that too many SME owners are tackling every business function without the simple support that could help them stay up to date and compliant.

To get the workforce management help you need, talk to us.

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