Human Resource Management Plan for SMEs: Importance and Impact on Business Growth

This document discusses the importance of Human Resource Management Plan for SMEs and its impact on business growth. It explains the four main steps of HRM process and the purposes of HRM plan. It also explores the UK plan for SMEs and the HRM plan within SMEs. The findings section focuses on the Human Resource Management Plan Proposal and analyses Checkout.com, a medium-sized company based in London, and their HR operating model.

Managing Human Resources
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TABLE OF CONTENTS
EXECUTIVE SUMMARY......................................................................................................................................2
INTRODUCTION....................................................................................................................................................4
FINDINGS SECTION.............................................................................................................................................6
HUMAN RESOURCE MANAGEMENT PLAN...........................................................................................................6
CONCLUSION........................................................................................................................................................9
RECOMMENDATIONS.......................................................................................................................................11
REFERENCES.......................................................................................................................................................12

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Executive Summary
It will be discussed in this document how Human Resources Management Plan is essential
for all companies that what to maintain business progress and evolution throughout years.
What is a Human Resource plan?
 Human resource planning (HRP) can be defined as the set of activities which are
performed by an organization in order to maintain good and highly skilled employees
and avoiding employee shortage or their surpluses.
 A good HRM strategy of an organization leads it to have better productivity and
higher profitability which makes it thrive.
 There are four main steps are taken in order to carry out HRM process efficiently.
Present supply of employees, determination of the future of workforce, maintaining
balance between the demand and supply, development of plan in attempt to support
the business goals.
What are the purposes of HRM plan?
 Human resources planning ensures a great balance in term of employees and the jobs
so can avoid any types of surplus or shortage of manpower.
 They take some key steps which are four in number, these stages are helpful to make
the organizational practises highly productive and fulfilling their requirements of
manpower. The main aims it perceives is to bring strong productivity to the
organization.
What impact a Human Resource management plan has on SMEs companies?
In the present scenario, the interest is getting up pertaining to take the benefits which may be
accrue to the organization, they can take extensive help of highly formal and effective
human resources. With strong HRM practises the organizations or firms can hike their
performance and human capital. It paves way to structure the jobs in a manner which leads
to hike the employee participation and the undertaken process improvement, soaring
motivation and guiding employees to make bigger contribution to achieve the goals.
This research is focused on evolution of effectiveness of performance, for instance- training,
recruitment process, quality of work, team work efforts, appraisal and practise of incentive
pay etc.
What SMEs need to do to have a successful?

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SMEs can get foster by abiding with some notions, which are described as four fundamental
key for success:
1) Applying technology
2) Agility
3) accelerated innovation
4) Attracting talent.
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Many SMEs are developing growth strategies by focusing their expertise in niche markets,
driving sales growth at home and abroad. Finance remains a key challenge for SMEs and a
significant opportunity exists for financial providers to assist growing SMEs.
There are some salient stakeholders who can help to bring such predicaments favouring
SMEs practises. Such as policymakers, government, and some other types of agencies.
There is need to perceive the fact that different SMEs have their individual needs as suits to
their nature.
UK recent SMEs statistics
In UK around 6.0 million Small and Medium sized organizations are getting operated. Is
constitutes around 99% of the businesses. In Micro 0-9 employees are considered. Across
5.7 million such Micro business are there by the year 2020 which constitutes around 96%.
Yet these businesses are accounting around 33% and 21% of the total employees.
Large businesses are approximately 8000 have more than 250 workers. It accounts 0.1% of
the businesses but have 39% employees and 48% turnover. (GOV.UK, 2021)
Introduction
SME an acronym used for stating Small and Medium Size enterprise. In the UK it is
considered a SME a company with fewer than 250 employees (Nascimento, C.M.R. da S. do
2017) Small and medium sized enterprises (SMEs) play quite significant role in the nation’s
economy. This SMEs are having their great share in the nation and are constituting around
99.9%. They outnumber large firms considerably, employ numbers of people and are
generally full of entrepreneur atmosphere, helping shape innovation.
How SMEs operate?
As it has been seen that SMEs are having their key focus on sort of single of multiple
services or products in order to make the tasks simpler, so the founders or other
organizations want to bring the almost same or similar products into the market. These

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companies typically have already formed a developed business model, and have the
necessary capital to move onto forward with business development. Majority of them are
seen to be found by their founders with use of external sources for money.
SMEs have structure how the revenue of the company will be achieved. But it is important
to continue to explore the market by making a research to help figure out the demand for
certain product or services. At the same time, it offers a significant outline to the
organization pertaining to the goal, vision, mission and marketing, management, HRM so
can work with greater efficiency.
SMEs operates with their limited resources but hyper capacity of giving jobs and satisfying
the needs of society. Over the time it has been seen that they do not have much resources but
with better management they make these tasks simpler.
What is the UK plan for the SMEs?
The UK government has planned to spend £1 in the SMEs, it would be either direct or may
use some different supply chain so can proceed with the work by the year 2022.
This augmentation is having a well-planned aim since the nation is now striving to hike the
size of overall economy. For grabbing the aim of 33% target, there are number of measures
can be taken into consideration. Procurement, accessibility, breaking the barriers for these
types of organizations, ensuring higher level of supply chain etc. The government is hugely
aware that such organizations are having still a great scope to attain their apex and with this
respect the best alternative would be facilitating their business so can augment the overall
performance.
(GOV.UK, 2021)
What is a Human Resource Management (HRM) plan within SMEs?
HRM plan is a well-structured strategy which is fabricated in order to help SMEs to operate
their business with greater emphasis. They are supposed to carry out their business with ease
which will be provided by a well-structured Human Resource Management. In an
organization the role of Human resource is quite essential due to the set of experience and
skills they come up with.
The human resource management plan establishes guidelines on how the human resources for
project management should be defined. It also involves the staffing, managing, controlling
and releasing of the appropriate human resources. Moreover, it is also involved in identifying
different training strategies for developing the project team comprising of qualified and
skilful team members.
The thing is that this process creates a guidance on how the human resources should be
utilized. The role of this process includes identifying the roles and responsibilities of the

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different positions and skills necessary for the project demands. With greater and highly
efficient Human resource teams the organizations can get thrive.
Organising a HRM plan also investigates the rewards, feedback and disciplinary actions to
the staff. The human resource management plan is also involved in the assessment of the
team members which is necessary for the success of the project.
The role of human resources is to guide the employees for their work and to utilized them I
such way it contributes in success of the company. Along the role of HR department is to hire
people and give them role and responsibility on the basis of their skill so to achieve the set
targets of the company and to meet the needs of project demand (Votto and et.al., 2021).
Moreover, while designing the HRM Plan it is important to identify the opportunity and
factors which will motivate employees such as rewards, giving them feedback. Human
resource plan also include development of team member that will be necessary for the
success of the organization.
In addition to this, main aim of this process is to make sure that there is appropriate amount
of employees involved in the project and it should have accurate skills and experience to
complete the project work. While allocating the human resource requirements proper
documentation need to be formed that describe requirement of HR in the success of company
(Project Management Knowledge, 2021)
.
Findings section
Human Resource Management Plan
Human Resource Management Plan Proposal
Every company needs a good Human Resource Plan in due course in worder to make
everyone feel safe in the workplace.
When it comes to SMEs, the human resource management plan must be consistent in order
to maintain the good productivity of the company for those reasons, most of the SME’s

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continue to focus on contracts, pay and admin, and adding a more holistic HR approach
addressing the employee lifecycle and thinking about what’s really going to make a
difference to the long- term health of the organisation.
The fact cannot be rejected that with the progress of time the need also took place to sharpen
the overall skills and ability to manage the human resources which are the most significant
resource for an organization.
It is always important to build a plan that prioritizes the company values and the employer
and employee’s well-being.
The Human Resource Management Plan Proposal will be based in a HR operation
model.
Operation model: with this respect Bersin Human Resource Model, is the base of the HR
Management Plan Proposal that will be present in this document.
Josh Bersin, innovate the world of HR by implementing his organisation model. The model
is divided in 4 stages:
1. The operational approach that consists in control the company workers.
2. The Service Centre approach that consists in provide services to staff effectively.
3. For higher performance team the model discusses Talent acquisition and their
management approach.
4. High-impact and business driven approaches of HR. which align with reflecting local
impacts on the organizations.
The model brought clarity and a sense of effectiveness when it comes to how companies as
SMEs organise the HR department. The advantages that come along with this model is the
positive evolution of human resources in organisations, for including a range of diverse and
experienced workers and this was possible also because of the embrace of changes regarding
technology.
The disadvantage or number one issue that companies are facing following this model is
achieving the fourth stage, because most CEO agree that the HR department is struggling to
find the right qualified workers to have more local impact in organisations.
Based on Bersin operation model, the HRM plan proposal, that will be presented in this
document consists in:
1. Implementation of a list of duties and expected results to be conclude by every
worker.
2. Training programs, and development progress checks to be done for the new
employees.

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3. Prioritize the best and newest services, softwires into the company and make sure all
workers learn comfortably how to use them.
4. Implement a very good resourcing strategy plan that will adapt more comfortably
into a SME. Having a resourcing plan, I will help:
 SMEs manage resources efficiently – by making sure that their hires have enough
tasks to work on, without overloading staff members. Resourcing plan helps the
business understand what their most available resources are, no matter how
scarce these are., a resource plan makes sure that everyone is using their time and
availability efficiently.
 Identifying the need of scale- One of the crucial job of HR is to evaluate the
number of labour required for completing the particular task. Along with this, if
the anticipation has been made properly it will be very useful at the time of
workload. However, with the help of plan for resources small firm can reduce
the threat of unaccepted situations related to excessive working from the
employees It will be beneficial at the time of workload season and allow
company to achieve the set goals.
 Connection of team member: In order to increase the success SME has to
connect with their team and build the spirit of collaborative working. Along with
this, when there is healthy relation with the team it resolves issues related to poor
communication which contributes in creating transparency within employees.
Thus, connection with the team should be the priority of HR and small firm as it
helps in meeting the work deadlines (Liu, Qingqing and Liu, 2021).
5. Provide optional online course to all staff and incentive employees to increase their
knowledge in order to execute better their job.
6. Present learning experiences to the employees while making sure they are engaging
in develop other skills that will boost the business development and success.
7. Guide and identify areas of improvement and empower all the workers in the
organisation.
8. Organize a weekly team night to discuss business goals and networking, and monthly
workshops for staff in order to maintain all engaged in gain more skills to contribute
for the business success strategy.
It is important to develop a strict human resource management plan in order to have the best
results withing organisations.
The UK, have a vast list of SMEs all over the country that contributes a lot for the economy.
Most SMEs follow similar human resource operational model in to allow growth and
success of the companies.
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In this document will be analysed a SME, and the human resource operating model
currently used.
SME Company – Checkout.com
Checkout.com is a medium sized company based in London, (UK) that have a main goal to
unrivalled payments performance that powers people growth.
Their system is a cloud-based payments platform helps increase business moving things
faster. With the modern technology and modular solutions, the users can do complex things
with ease and shape the ideal solution for your vision. Actionable, end-to-end data gives to
the customers a complete picture of money flowing in and out of the business with instant
insights.
The customer can make use of the advance technology in order to make faster decision.
Along with this, audience can make use such tools in order to meet up with the changes of
the organization needs and demands. The organization can make use of the payment system
so that it can improve the performance of the business. It can improve the technology
through brilliant checkout experiences (Liu, Qingqing and Liu, 2021).
The company was founded in 2012, and quicky expand from a start up to a medium
enterprise business, a few years later the company also expand their business to another
country around Europe, United States and United Arab Emirates and China worth £1.5
million. (Checkout.com, 2021)
The company have a HR management operating model like the Bersin approach, and that
company is between stage 2 and 3 when it comes to HRM plan, because their focus is on
provide the services for their employees and build a qualified teams while they try to expand
the business into another locations. The company broken down the hiring process into four
key stages, highlighting what to expect, what you will achieve after being part of the
company, and how to excel at each stage (Kalogiannidis, 2021).
They provide all the tools for the employees in the different locations, and all teams must
work together to be the highest performing in order to achieve business goals. Checkout.com
HR management operating model has similar approach to the HRM plan proposal presented
in this document as they provide good control of new employees and have a high standard
when it comes to create teams that will perform in the best interest of business growth.

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Conclusion
Small and medium sized enterprise are assets to most economies around the world, for that
reason these companies are highly valued by the countries governments because they are seen
as source of income even if the economy goes through tough challenges. Either way, every
country has his own concept about SMEs, the main topic presented is look further in how
United Kingdom economy celebrates SMEs.
The importance of SME in the UK economy
- The low productivity happened due a lot of changes on the UK guidelines and rules,
as Brexit. Covid-19 pandemic has also responsible for this scenario.
- Improving the UK’s low productivity is a key challenge to generate growth in the
economy. SMEs are a vital part of the economy, accounting for 60 per cent of all
private sector jobs and 47 per cent of revenue.
- SMEs are a key underused resource for increasing productivity. With the UK lagging
many G8 competitors in the share of high-growth SMEs, the report, based mainly on
ERC research, explored the structural barriers limiting SME growth. Innovation and
international expansion (internationalisation) were identified as key factors to
stimulate growth.
The importance of Human Resource Management
Human resource management operations contribute significantly to the success of an
organisation. HRM can be defined as the effective management of people in an organisation.
HR management helps bridge the gap between employees’ performance and the
organisation’s strategic objectives. Moreover, an efficient HR management team can give
firms an edge over their competition (Hamouche, 2021).
A HR manager have the responsibility of:
 Recruitment: One of the major responsibilities of a HR manager is to recruit
personnel. The success of an organisation largely depends on the workforce
employed, so it is essential that the right people are hired for the right role.
 Learning and development: Learning is a continuous process and essential to enhance
employees’ productivity. HR managers are responsible for the orientation and
induction of new employees, as well as the professional development of existing
employees.
 Building employee relations: Effective employee relations go a long way in boosting
productivity and contributes significantly to an organisation’s success. Employee
relations strategies are implemented to ensure that an organisation caters to the overall
well-being of employees (Boxall, 2021).
By complying effectively with these top responsibilities, the HR department is making
sure the stabilization and growth of the company.

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HRM aligned with SMEs growth
The role of the HRM in small industry is to create a good opportunity in the production
process and to manage the employees of the organization. Most of the HRM operates in
environment in which high competition has been present and company have limited resource
to deal with the challenge and to find out the innovative process. Moreover, the important
role of HR in small company is to promote the business leader and to manage the growth rate
with the limited resources as well as to meet up with the growing needs of the worker.
However, it has been identified that small organization do not lay more importance to HRM
as they have fewer number of employees (Anwar and Abdullah, 2021). In addition to this,
small firm can pay attention to the operational strategies by paying attention to the functions
of HRM. As company grow it need to increase their human resources and functioning so to
achieve the set objectives. Along with this, most of the SME has shortage of funds and
expertise to implement the function of HRM so in order to deal with it SME can outsource
the HRM function for short period and manage the available resources.
However, the growth of small firm will solely depend on the performance of the employees
so there is need of talent management and engagement practice so to develop culture of the
company.
Importance of creating a HRM plan
Human resource planning enables businesses to meet their current and future demands for
talent, allowing human resource managers to anticipate and develop the skills most valuable
to an organization, and providing the enterprise with the optimal balance of staff in terms of
available skill sets and numbers of personnel. Proper planning also provides a path for future
development by establishing a reservoir of talent capable of filling leadership roles. And in
the long term, human resource planning helps align human capital management more closely
with business strategy (Al-Swidi and et.al., 2021).
Recommendations
As previously mentioned in this document, most of the SMEs are following similar HRM
plan inspired on Bersin four stages approach.
In general, the SMEs are making a great job my achieving most of times the stage 3 approach
of the model, the issue is the ability to achieve the fourth stage of the model. Only 5–10% of
companies are climbing to the fourth stage of the model as they focus in the new phase of
growth of the companies.
Recommendations for SMEs achieving effectively highly local performance teams are:

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 Small organization can make use of advance technology in order to deliver better
workforce and to reduce their HR administration cost. The use of technology has been
increased from the last year such as HR analytics and cloud based offerings.
However, software service will help human resource leader to deliver good services
so to increase the workforce competitiveness and reducing the labour cost. Along with
this, cloud base applications help in storing the data of company and employees on
one click in order to reduce the need for physical storage and IT support (Agarwal,
2021).
 Moreover, SME’s are facing issues with expertise and talent gap as well as finding
skilled workforce. In order to reduce this challenge companies can improve their
recruiting process and hire employees on the basis of their skills and performance.
 Training and development programmes need to be conducted as it is one of the
biggest motivator of employees to work hard and to groom themselves.

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