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SMEs (small and medium-sized enterprises) often face unique challenges when it comes to managing and developing their workforce. Unlike larger organisations with dedicated HR departments and extensive resources, small businesses must often juggle multiple priorities while still ensuring that their employees feel valued, supported, and engaged. Do any of these HR challenges sound familiar to you?

  • You’re too busy recruiting to be strategic.
  • The quality of induction varies depending on how much time you have (which is usually not much!).
  • There are no tools or technology to analyse specific needs so training is ad hoc or non-existent due to budget constraints.
  • Managers have had little or no training in people management.

If any of these resonate, you’re not alone. Many small businesses face similar struggles. The good news is that there are practical ways to overcome these challenges and prioritise professional development or employee training effectively. In this blog, we’ll explore three actionable steps to free up time, enhance employee engagement, and foster a culture of development within your SME.

Step 1: Induct People Well and Ensure They Understand Their Role

The quality of your staff induction process can have a direct impact on employee engagement retention and overall satisfaction. Yet, in fast-growing SMEs, onboarding is often overlooked in favour of recruitment efforts. This is a critical mistake, as neglecting onboarding can lead to higher attrition rates and wasted investment in recruitment.

Consider one of our clients, a fast-growing international business that recruited 20% of its workforce within a year. With the HR team’s focus solely on recruitment, onboarding was inconsistent and rushed. This resulted in above-average turnover rates, causing additional strain on the business.

Research consistently shows that an employee’s first weeks in an organisation directly impact how long they stay. A well-structured induction process not only helps new hires feel welcomed but also ensures they understand their role, the company culture, and how they fit into the organisation’s goals. Here’s how you can improve your induction process:

  • Assign a Mentor or Buddy: Pair new hires with experienced colleagues who can guide them through their first weeks.
  • Set Clear Expectations: Provide clarity about their role, responsibilities, and objectives.
  • Introduce Key Stakeholders: Facilitate meetings with team members and, senior managers and leaders to help them build relationships early on.
  • Provide a Development Plan: Ensure they have defined development objectives coupled with the tools, training courses, and any support they need to take on new skills and knowledge

By investing in a thorough and consistent induction process, you’ll set new employees up for success and reduce the likelihood of early turnover.

Step 2: Highlight On-the-Job Development Opportunities

Many small business owners underestimate the professional development they can offer to help people achieve their career goals. They may assume that discussing career aspirations or professional growth is unnecessary because they cannot provide the same career paths as larger companies. However, the truth is that SMEs often provide far more varied and meaningful development experiences.

In a large organisation, an employee may have a narrowly defined role, such as managing a single social media channel. While they may gain expertise in that area, their broader skillset might remain underdeveloped. In contrast, employees in SMEs often wear multiple hats. For example, a marketing role in a small business might involve:

  • Managing social media channels.
  • Creating content and developing campaigns.
  • Handling PR and brand messaging.
  • Engaging with sales and customer relationships.

This diverse experience allows employees to develop a broad range of skills that are invaluable for their future careers. As an SME owner or manager, you can foster this development by:

  • Encouraging Cross-Functional Collaboration: Involve employees in projects outside their immediate roles to broaden their skills.
  • Share Feedback: Highlight their progress and achievements to show how they are growing.
  • Documenting Development: Keep track of their skills and experiences to demonstrate their progress over time.

Remember, development doesn’t always require a formal training budget. On-the-job learning, mentoring, and access to free or low-cost resources can be just as effective.

Step 3: Have Career Conversations and Celebrate Ambition

Talking to employees about their career aspirations is essential, even if you fear you can’t meet all their expectations. Many small business owners avoid these conversations because they worry about raising hopes they can’t fulfil. However, avoiding the topic entirely is a far greater mistake.

Career development and talent management aren’t just about promotions or salary increases. They’re about understanding what motivates your employees, recognising their potential, and helping them envision a future within (or beyond) your organisation. Here’s how you can approach these conversations effectively:

  • Be Open and Supportive: Don’t feel threatened if an employee expresses a desire to grow beyond their current role- even if they aspire to your position! Instead, celebrate their ambition and help them develop the skills needed to take on more responsibility.
  • Identify Motivators: Everyone is driven by different factors, such as flexibility, recognition, or new challenges. Don’t assume you know what motivates your employees; take the time to ask.
  • Create Opportunities: In small businesses, it’s often possible to design roles or projects that align with an individual’s aspirations while benefiting the company. For example, if an employee shows an interest in leadership, you could give them the chance to lead a small project or team.
  • Focus on Development, Not Just Job Titles: Even if you can’t offer a specific promotion, you can still provide meaningful development opportunities, such as training, mentoring, or new challenges.

Having these conversations helps build trust and engagement. Employees are more likely to stay loyal to a company that invests in them and shows genuine interest in their future.

Overcoming Common Barriers to Staff Development in SMEs

Even with the best intentions, small businesses often face barriers to implementing effective staff development initiatives. Here are some common challenges and tips to overcome them:

  1. Time Constraints:
    • Solution: Prioritise development as part of your regular operations. Even short, informal check-ins can make a difference.
  2. Limited Budgets:
    • Solution: Leverage free or low-cost resources, such as online courses, webinars, and industry events. Encourage knowledge-sharing within your team and build your own e-learning or training powerpoints.
  3. Lack of Manager Training:
    • Solution: Invest in basic management training to help your leaders support and develop their people effectively. Tools like Actus Software can make this process more manageable.
  4. Fear of Losing Employees:
    • Solution: While developing your staff may increase their marketability, it also boosts their loyalty and productivity. Employees who feel valued are less likely to leave.

Why Staff Development Matters for SMEs

Investing in staff development isn’t just a “nice to have”- it’s a strategic priority that can drive long-term success for your business. Here’s why it matters:

  • Improved Retention: Employees who feel supported and valued are less likely to leave, reducing recruitment costs and disruption.
  • Enhanced Performance: Well-trained employees are more productive, innovative, and capable of driving business growth.
  • Stronger Employer Brand: A reputation for investing in staff development can help attract top talent, even in a competitive job market.
  • Future-Proofing Your Business: Developing your employees’ skills ensures that your business is prepared to adapt and thrive in a changing environment.

How Actus Software Can Help

If you’re a small business looking to streamline your HR processes and improve the way you support and develop your people then, Actus Software has a suite of software that can make your life easier. Our tools can help you:

  • Track and manage employee performance
  • Easily facilitate employee training and development.
  • Facilitate regular check-ins and career conversations.
  • Host learning content and training modules on our simple to use Learning management system
  • Build a culture of continuous improvement.

By partnering with Actus, you can empower your managers, support your employees, and focus on growing your business.

Final Thoughts

Developing people is an essential but often overlooked aspect of running a successful small business. By focusing on induction, on-the-job learning, and career conversations, you can create a workplace where employees feel valued, motivated, and empowered to succeed. Overcoming the challenges of limited time and resources may require creativity and commitment, but the rewards- increased retention, performance, and growth- are well worth the effort.

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