Small- and medium-sized businesses (SMBs) comprise the ‘engine room’ of the UK’s business economy.  Recent figures from the Department of Business Skills and Innovation underline their importance and reveal  that SMBs make up 99% of all businesses and account for 59% of all private sector employment and 49% of all private sector turnover, so there’s nothing ‘small’ about their role in contributing to the economic recovery.

It’s also encouraging to see the number of UK SMBs have grown hugely in the past decade, rising from 3.5 million in the UK in 2000 to 4.5 million in 2011, according to the Federation of Small Businesses.

Alongside this, The Voice of Small Business Index, found that 15 per cent of SMBs have increased their staff numbers in the third quarter of 2013. This is the highest figure reported since the Index began in 2010 and mirrors recent improvement in labour market figures.

All this points towards a positive future outlook for SMBs, who have been hit especially hard during the recent recession. Often lacking access to cash and capital they are also more likely to suffer from a lack of management experience and breadth of expertise that can be found in larger enterprises to help weather tough times. Many have been forced into operating in survival mode, and workforce issues often go on the backburner as a result.

But if SMBs are to step-up and fulfil the role assigned to them as drivers of the economic recovery, then they need to shift this outlook; they need to stop thinking about just surviving and start to innovate and grow while still squeezing the maximum benefit from every available resource at their disposal.

Move from survival to thriving mode

Regardless of size or industry, a focus on the short term can be catastrophic for a business trying to grow – it’s the old adage “failing to plan is planning to fail” – but failure to plan is a classic pitfall for SMBs.

It’s easy to see why so many businesses fail to look ahead adequately. For SMB owners who often have responsibility for more than one aspect of the business (HR, Finance, IT) it can be a challenge to set aside time to plan as it often means time spent away from driving growth and adding to the bottom line.

The process of writing a plan allows the consideration of all aspects of the business, from competitors to staff, products and services, current and future markets. It enables the analysis and examination of how changing one area of the business might affect others. It can also enable you to set a range of vital KPIs – perhaps units sold, phone calls made, volume of web traffic, new clients gained. Decisions can then be made on concrete information about performance and future planning.

Leadership and employee engagement

Given the close-knit nature of SMB teams, strong relationships built on effective internal communication is fundamental to success. It’s no secret that an open and collaborative business environment automatically leads to better behaviour in the workforce and greater employee engagement.

Employee engagement is something that many businesses are currently investigating and seeking to improve. Employees work best and most productively when they are engaged in the business and feel they are working in a culture of fairness, transparency, with good two-way communication. They often want to be involved in business decisions then and if they feel consulted, they are likely to make an extra effort and believe that they can make a real difference to the long-term business goals.

Staffing and people management issues are very often the central and chief concern of an SMB, be it managing talent and giving staff the right opportunities, attracting and retaining the right staff into the organisation or simply the day-to-day issues of keeping staff productive and engaged.

For many businesses the solution lies in making the shift away from manual or paper-based HR/workforce processes to automated systems. A comprehensive workforce management solution that takes in time and attendance, human resources, and access control is no longer the sole preserve of a large enterprise; it can rapidly deliver value to a small business.

The benefits of such a service include improved workforce productivity, lower labour costs, and a reduction of the risks associated with employment law compliance. For the SMB leader looking to foster a culture of openness and collaboration to drive the business forward it can remove many of the headaches of day-to-day staff administration and deliver the reporting and analytics needed to support decision-making. It also simplifies the experience for employees because they can access their schedules, jobs and holiday records from one place. In fact, organisations with automated time and attendance solutions achieved 12% greater workforce capacity utilisation than those with manual time and attendance processes (according to Aberdeen Group research).

Where next?

As Europe slowly recovers from recession, many small businesses are searching for ways to grow. Effective employee management is essential to this growth and a robust plan that considers all aspects of the business and engenders an open and collaborative working environment where employees feel valued and involved in the business’ success is a good place to start and should be taken serious by SMB owners looking to thrive in today’s economic climate.