Small and mid-sized businesses are confronting substantial human resources obstacles according to recent research from HR.com's HR Research Institute conducted in partnership with UKG. The study titled "HR Decision-Making in Small to Mid-Sized Businesses" examines the specific difficulties facing organizations with fewer than 500 employees and identifies potential strategies for improvement. More than half of SMBs report dealing with major HR issues including talent retention, maintaining positive company culture, and hiring qualified staff. These challenges are especially significant in the current competitive business environment where smaller companies often cannot match the resources available to larger corporations.
The research reveals that 60% of HR professionals in SMBs identify retaining top talent as their primary concern, followed closely by creating a supportive employee culture at 58% and hiring qualified employees at 56%. Surprisingly, only 35% of SMBs consider employee reskilling and upskilling as a major concern despite the growing emphasis on workforce development in recent years. The study also uncovers notable differences between SMBs with more developed HR operations and those with less mature HR functions. Organizations with advanced HR practices tend to prioritize manager skills and quality hiring, while those with less mature operations focus more on fundamental compliance with employment laws.
Technology emerges as a critical factor in addressing HR challenges according to the findings. SMBs with more mature human capital management practices are significantly more likely to operate at strategic and advanced levels of HR technology usage. This suggests that aligning HR technology investments with leadership business objectives can substantially enhance decision-making and organizational performance. Julie Develin, senior partner of HCM advisory at UKG, stresses the importance of HR technology for smaller businesses, noting that having appropriate HR technology enables HR professionals to think strategically while supporting company growth. The complete research report is accessible through https://web.hr.com/9lxj and provides practical strategies for SMBs to address their HR challenges.
Debbie McGrath, chief executive officer of HR.com, highlights the transformative potential of strategic HR investments for smaller organizations. She indicates that intentional strategies in HR processes combined with effective technology investments can help SMBs better navigate their HR challenges and succeed in an increasingly competitive marketplace. As small and mid-sized businesses continue to face intense competition for talent and resources, the insights from this research provide guidance for enhancing HR performance and driving organizational success. By concentrating on key areas including talent retention, company culture, and strategic implementation of HR technology, SMBs can position themselves to overcome HR obstacles and prosper in today's dynamic business environment.
