SMEs need self-help, not government fiddling

If the government can't get the balance right helping small businesses, then they need to use good management and recruitment to get ahead.

by Kate Russell
Last Updated: 22 Apr 2013

As much as the government genuinely wants to help SMEs, it has a tendency to tinker round the edges without taking on board the very grave concerns of SME employers. A classic example is the abolition of the default retirement age at 65. Either the wrong thing gets fixed, or it gets fixed in the wrong way.  

Adrian Beecroft's recommendations have not found general favour either among employers or unions. Recently, Lord Young announced the latest enterprise scheme to support young entrepreneurs. It’s great to support entrepreneurs but in reality how many young people will benefit? And why limit it to 18-24s? Such terms are ageist as well as overlooking the fact that older workers can have a tough time in the marketplace.

The result is that the government’s efforts add to SME problems rather than helping to solve them: SMEs have to evolve some winning tactics of their own. The two most important tactics are a) to get smarter with recruitment and b) to become better at performance management. 

Rigorous recruitment processes and an intolerance of poor work performance can make the difference between profit and loss, success and failure. Employers are crying out for really good candidates; while unemployment levels are high, the calibre of some candidates is disgracefully poor meaning employers have to hunt very carefully.

One of my top tips to employers is ‘don’t recruit a problem’. If you are absolutely clear about what you want and you look and test for it relentlessly, you will stand a much better chance of getting the right person, first time around. 
Knowing precisely what the ideal candidate looks like is the starting point. Interviews are still frequently used and if you probe effectively they can yield good data. Build in masses of testing to collect data to ensure that you end up with the right person. The test content and format will vary depending on your requirements. 

A great example is the sandwich and coffee chain, Pret A Manger. Its recruitment team invites prospective employees in to work with alongside existing staff for a day. This way, both prospective employer and prospective candidate can get a good idea of whether it will work. Will they be OK with the physical work? And – just as importantly – will they meet the Pret values?

You can use remote testing processes to assess various skills, knowledge or attributes. For example, setting a brief for prospective candidates to complete and submit before being considered for interview, online skills or psychometric testing. This can save on interview time too because you only see really good prospects. 

Of course you can do pen and paper tests to assess numeracy (our accountant mutters darkly that you’d be surprised how many accountants can’t add up), letter writing skills etc. While nothing is foolproof, the more relevant data you gather at the selection stage, the better your chance of getting the right candidate.

Regarding poor work performance, the question to ask is: do all of your people meet all of your reasonable standards nearly all the time? Are you tolerating repeated minor ‘gravel in the shoe’ type poor performance? The answer almost certainly is ‘yes’. So stop it! It is not an inevitable part of work life. Start to manage poor performers through the capability process. If you don’t you’re storing up problems for the future, you’re unfair to them, their colleagues and to yourself. And you’re decimating your margins, which may already be under attack. 

Culturally we in the UK tolerate poor work performance. Too many employers don’t demand nearly enough and are far too nice for their own good and the good of their business. Let’s get business sorted out!

Kate Russell is the managing director of Russell HR Consulting.

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