Here's how SMEs can leverage this new way of working to grow smart.
Small business plays a critical role in economic growth. Most governments look to small businesses for job creation, creativity incubation and deployment, and the spurring of economic development.
The Organisation for Economic Cooperation and Development (OECD) reports that over 95 percent of enterprises globally are SME’s, accounting for between 60 percent - 70 percent of the working population and contributing as much as 60 percent to GDP.
However, those same small businesses typically struggle to survive beyond the 4 to 5-year mark from date of set up, for various reasons. Improving the performance of SMEs in a cost responsible manner should, therefore, be a major priority.
After all, the greater the chance of survival of SMEs, the more jobs are created, and the bigger the impact on the national economy. In smaller cities or villages, small businesses may be the only source of private-sector employment, so their survival is key.
The share of young SMEs in total job creation is about twice as large as their share in total job destruction. It is no secret that established medium-sized companies that scale-up, which often involves going global, is a driving force for job creation as well as the competitiveness.
When a start-up is busy bootstrapping, they should not neglect to build the right business culture from the beginning. Doing so can help them stay competitive in the HR front. A new business owner is busy thinking of ways to grow the business and increase revenue and market share. At this stage, the entrepreneur is not in a state of mind to put him/herself in the employee shoes. While, on the other hand, employees are putting in the hard yards during start-up mode, putting on hold their personal lives as they support the start-up vision.
Many emerging organisations do seek help for transactional needs, like payroll and leave management, as well as to stay compliant. Very rarely is attention given to foundational, systemic matters such as culture, values, beliefs. Unfortunately, there are too many examples of how bad people practices can take down a founder, through incidents related to harassment, exclusion, lack of diversity, etc. All of which are tied to a company’s DNA, incubated from its incorporation.
No matter how young an organisation, a lack of focus on talent risks having the wrong formative behaviours embedded in its culture, which could cause significant material or reputational damage later on.
Business today needs to be quick and agile. All entrepreneurs should be asking:
- How do I shape my organisation?
- What are my current and future recruitment needs?
- What policies do we need to have in place?
- What are the formal learning requirements we need to take care of in relation to issues like harassment, onboarding, etc?
In order to hit the ground running earlier than the competition, HR talent needs to be on-demand without having to build up an internal HR department. On-demand HR can help move from one priority to the next in a flexible way. This on-demand HR specialists’ talent can help a small business grow into a more established second stage business and can help a start-up or SME scale up in many smart ways while staying lean.
When business demand increases, talent demand increase. But then again, you need the talent to scale up the business. It’s a typical chicken or egg scenario. Reaching out to this on-demand HR talent helps scale-up, without overextending, and before committing to a heavier structure sitting on payroll full-time.
Hiring employees without a flow of revenue to support them can be high risk for small businesses and is unfair for those people who, having believed in the vision, may have left steady jobs to jump on board the start-up. Up to 7 out of 10 high growth internet start-ups fail due to premature scaling. Those are the start-ups that tend to lose the battle early on by getting ahead of themselves.
There has never been a better time to start a business. Not only can you have access to a FTSE 100 talent pool at a fair price with on-demand contracts, but you also can reach out to specialist expertise from around the world through niche, safe and secure collaboration platforms.
Scale is not an issue in such a scenario as the business starts right away without large overheads.
The old model of employment had small business owners selecting a few employees who could reasonably perform key business functions. Most of the time looking for resources within their budget and settling for generalists instead of specialists’ skills due to budget constraints. These new hires usually needed to be local hires and the business needed to have enough work for the person to justify the hire.
Today, you just need to ensure you are clear on your business plan and bring in the needed talent as and when needed. The Gig Economy is shrinking what was once a global talent pool and putting it at the fingertips of business owners.
Trend is here to stay
This new way of working is on a global upward spiral as freelance work is no longer working on a beach or only associated with creative work. A perfect storm of collaboration platforms, a change in attitude towards work, financial and environmental pressures, and a wake-up call when it comes to work-life balance, is driving this transformation.
With research esitmating that one billion people will be working remotely by 2020, this trend is only picking up momentum.
It’s no secret that people, from all around the world, are attracted to flexible work. The freedom to work from anywhere helps them stay motivated and focused, saves their company money, reduces stress level, helps alleviate traffic congestion and carbon emission and the cherry on top, allows them to get more done. Working from home has shown to increase productivity due to increased focus and simply actually working more, instead of navigating congested traffic to get to the office.
Our relationship with work is changing, from something we go to or do, to something we fulfil. More and more companies, cities, and countries are embracing this change and encouraging flexible arrangements. Niche collaboration platforms, such as OneCircleHR, are becoming the norm for businesses to connect with specialised consultants, virtually and on-demand.
As this new way of working grows in popularity, people are experiencing positive impact in morale, health and productivity, on their own terms. It is clear, the future is flexible and remote.