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Charlie Duff

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SMEs could add £15bn by applying HR planning


SMEs could add £15bn to the economy by using HR planning to become more effective and profitable, according to a recent survey.

A recent study has concluded HR planning is one of six key principles SMEs should adopt to tap into their competitiveness. A six-month study commissioned by Royal Mail compared growth rates among 500 small and medium-sized enterprises. It discovered that companies which had planned for staff development and future employment were 35% more likely to increase profitability and secure longevity for their business.

Worryingly the report revealed that less than half of all small and medium-sized enterprises (47%) are currently undertaking effective HR planning. We explore why this is the case and what SMEs can achieve with HR in the podcast below:

The other five elements of the six-step plan feed into human resource planning, indicating effective HR planning is an ideal base on which to support successful business initiatives.

Stephen Roper, professor of enterprise at Warwick Business School, which undertook the research, said: "As the economy moves out of the recession and into a period of growth, adopting the blueprint will help firms make the most of the new opportunities that will emerge and so allow them to maximise their growth and profit potential."

The report also adds that companies which have successfully adopted at least half of the recommended blueprint’s six ingredients for success have been more profitable than their competitors and have grown quicker too. It is estimated that with these blueprint principles SMEs could contribute an extra £15bn to the UK economy.

These are the five other key ‘Blueprint for Success’ factors identified by the Warwick Business School:

  1. Flexibility – flexible and responsive managerial approaches enables customer expectations to be surpassed
  2. Business process efficiency – reduce costs and improve efficiency by addressing internal processes
  3. Marketing – use the right marketing methods to make potential customers more aware of products and services, such the internet and mailshots
  4. Growth ambition – have a growth objective to shape a business’s strategy and its willingness to invest in development
  5. Research and development – get a thorough understanding of the markets and the best ways of delivering services, allowing a business to compete more effectively
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Charlie Duff


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