New research finds a lack of dedicated payroll and HR expertise is putting SMEs at greatest risk of regulatory and compliance failures.
If you run an SME, chances are you won’t have dedicated HR or payroll support. As a result, you are exposing your business to more risk than any other business group. That’s the major finding of research carried out by OnePoll and commissioned by Jobandtalent.
This news probably doesn’t come as any great surprise. By their very nature SMEs are less likely to have people in-house whose specific role is to manage HR and payroll – but the survey of 500 SMEs does reveal some worrying insights:
- Only 37% of small business owners believe they have a good understanding of regulatory changes and keep up to date.
- 25% said that while they do have a good understanding they don’t keep abreast of changes.
- 12% said they had little to no understanding of present employment regulations.
The lack of understanding – and the lack of expert support – is having numerous effects. The Pensions Regulator has announced that the number of employers being fined up to £10,000 for non-compliance issues has risen by 300% in just 3 months. Meanwhile, 22% of SME owners said they spent between 2 and 5 days ‘onboarding’ staff. With a lack of a specific HR or payroll functions within the business to manage NI and tax issues, payroll registration, pension enrolment etc, the responsibility is inevitably falling to business owners, most of whom have neither the time nor expertise they really need.
James Peck, UK managing director of Jobandtalent, said: “We know that small business owners need to hire great talent to grow, but this research sadly shows that a number of UK small businesses are still taking enormous risks when hiring and managing their staff.”
Reducing the risk
It is a perfect storm of non-compliance. Business owners who don’t have the time to carry out HR functions properly, feel they have no option but to do it to the best of their ability. As a result, they are kept away from the areas of the business where their efforts would be better placed.
Jobandtalent’s thrust was to outsource HR and recruitment. We would suggest that this only removes half of the issue. The other half – payroll processing, pensions, tax, NI and everything else that goes into effectively managing staff – can be addressed by outsourcing payroll.
Of course, you would expect us to say that, but the evidence the OnePoll research presents only emphasises something we’ve known for years: that SMEs the length and breadth of the country are losing time and money trying to manage payroll in-house, when there’s a simple alternative available that can cut the effort, cut the time, and cut the risk of non-compliance at a stroke.
To find a better way to manage your payroll talk to us here.