New Study Reveals Key Strategies for SMBs to Overcome Major HR Challenges

Small and mid-sized businesses (SMBs) are facing significant human resources challenges, with over half struggling in areas such as hiring, retention, and maintaining a positive company culture. A new study conducted by HR.com's HR Research Institute in collaboration with UKG, a global HR technology company, sheds light on these issues and provides potential solutions for SMBs to thrive in today's competitive business environment.

The study, titled "HR Decision-Making in Small to Mid-Sized Businesses," focuses on organizations with fewer than 500 employees and examines how HR professionals manage their strategic processes, practices, and responsibilities. The research reveals that the top concerns for HR professionals in SMBs are retaining top talent (60%), creating a supportive employee culture (58%), and hiring qualified employees (56%).

Interestingly, only 35% of SMBs cite employee reskilling and upskilling as a concern, despite the growing importance of workforce learning and development (L&D) in recent years. This finding suggests that many SMBs may be missing out on an effective strategy for filling open positions and retaining employees through skill enhancement.

The study also highlights a notable difference between SMBs with more mature HR operations and those with less developed HR functions. Companies with more advanced HR practices tend to prioritize manager skills and quality hiring, while those with less mature HR operations focus more on fundamental aspects such as compliance with employment laws.

Technology implementation emerges as a critical factor in HR maturity and effectiveness. The research indicates that HR leader organizations with more mature human capital management are significantly more likely to be at strategic and advanced levels of HR technology usage. This finding underscores the importance of aligning HR tech investments with leadership business goals to drive better decision-making and organizational success.

Julie Develin, senior partner of HCM advisory at UKG, emphasizes the crucial role of HR technology for businesses with leaner teams: "Having the right HR technology in place at businesses with leaner teams is crucial, so HR professionals can think strategically while helping the company scale. By building on the right foundational areas, HR technology improves workflows, streamlines roadblocks, and enhances the overall employee experience."

Debbie McGrath, chief instigator and CEO of HR.com, further reinforces the importance of strategic HR technology investment: "Strategic investment in HR technology may be a game-changer for SMBs. By adopting intentional strategies in HR processes and investing in effective tech, SMBs can better navigate their HR challenges and thrive in an increasingly competitive environment."

The study offers several actionable strategies for SMBs to address their HR challenges:

1. Prioritize employee retention and culture-building initiatives to create a supportive work environment.

2. Invest in quality hiring processes to attract and secure top talent.

3. Consider implementing employee reskilling and upskilling programs to fill skill gaps and improve retention.

4. Align HR technology investments with business goals to enhance decision-making and organizational success.

5. Focus on developing manager skills to improve overall HR performance and employee satisfaction.

As SMBs continue to navigate the complexities of today's business landscape, the insights provided by this study offer valuable guidance for HR professionals and business leaders. By adopting these strategies and leveraging appropriate HR technologies, SMBs can position themselves to overcome their HR challenges and foster growth in an increasingly competitive market.

For more detailed insights and expert advice, HR professionals and managers from SMBs can access the full research report, "HR Decision-Making in Small to Mid-Sized Businesses," and view the recorded session, "The Art of Finding and Keeping Top Talent: Expert Insights for Lean HR Teams."