What Is the Best HR Support for SMEs?

Having worked as a freelance HR consultant for the last 16 years, I've supported hundreds of SMEs across a wide range of sectors. During that time, I've seen first-hand the different ways businesses access HR support, along with the advantages and disadvantages of each approach.

Before deciding which option is right for your business, I think it's worth taking a step back and asking yourself what you actually need HR support to deliver.

Here are a few questions to consider:

• What is my current headcount, and is it likely to change over the next 12 months?

• What sector do I operate in, and what are the typical people challenges within that sector?

• Is it important that my HR provider understands my industry?

• Am I looking for reactive HR support to deal with issues as they arise, or do I want a proactive HR partner who helps me plan ahead?

• Is it important to work with someone who knows my business?

• Have HR decisions cost my business money in the past, and how important is it to reduce that risk?

• What budget do I realistically have available?

There isn't one "right" answer. The best solution depends entirely on your business, your growth plans, and the level of support you're looking for.

Based on both my experience as an employee and as a freelance consultant, here are my thoughts on the main options available to SMEs. These are simply my opinions based on what I've seen over the years, and others may have different experiences.

Internal HR

Every growing business reaches a point where HR becomes a role in its own right rather than something that's added onto the responsibilities of an office manager or finance manager. Exactly when that happens will vary from business to business, but in my experience it's often around the 100-employee mark.

Building your own internal HR function allows you to create processes that fit your organisation, develop detailed knowledge of your business, and provide day-to-day support that's closely aligned with your culture and objectives.

The biggest drawback for many SMEs is cost. Employing an HR team creates ongoing salary commitments, and many internal HR departments still bring in external specialists for areas such as leadership development or employment law advice, so those costs should also be considered.

Overall, this is a strong option for growing businesses that have reached the stage where a dedicated HR function makes commercial sense.

National HR & Health and Safety Package Providers

There are several large organisations across the UK that provide an all-in-one HR service for SMEs. These packages often include employment law advice, health and safety support, HR software, online training, tribunal representation and, in some cases, insurance to cover tribunal awards.

For business owners who want the reassurance of having everything under one roof, this can be an attractive option.

However, before signing up, I'd recommend doing your homework. Read reviews, compare what's included, understand the length of the contract and don't allow yourself to be pressured into making a decision based on worst-case tribunal scenarios. Make sure you understand the cancellation terms too, as many providers require long-term commitments.

Many businesses receive excellent support from these organisations, but it's always worth comparing the alternatives before making a decision.

Subscription-Based HR Helplines

Employment law helplines are often included as part of memberships or subscriptions you may already have.

They can be incredibly useful if you simply need a quick answer to a straightforward employment law question, making them a very cost-effective option.

Where they can become more challenging is when you're dealing with a complex employee relations issue that requires ongoing support or someone to work alongside you during processes such as a redundancy consultation, disciplinary hearing or workplace investigation.

For many businesses, a helpline works well as part of a wider HR support strategy rather than being the only source of advice.

Freelance HR Consultants

This is, of course, where my own business sits. However, I haven't written this article simply to promote freelance HR consultants because I genuinely don't believe this option is right for every SME.

Most freelance HR consultants either work independently or in small teams, supporting a portfolio of local businesses. They typically offer access to experienced HR Manager or HR Director-level advice without the ongoing cost of employing someone full time.

Support is usually flexible. You might only need occasional advice to help you stay legally compliant, or you may want a retained service alongside support with recruitment, restructures, investigations, management development or wider HR projects.

For many SMEs, this provides access to senior HR expertise at a much lower cost than building an in-house team.

That said, it's still important to understand how the pricing works. If you're relying heavily on external support from freelance consultants, costs can soon build up.  Also if you are looking for a technical legal answer after making some risky employment related decisions an employment solicitor may be a better option.

One advantage of working with a freelance consultant is that their reputation is often built through recommendations and long-term client relationships. Reading testimonials or speaking to existing clients can give you confidence that they're the right fit for your business.

Employment Solicitors

Finally, there's the employment solicitor.

Solicitors provide specialist legal advice and are invaluable when dealing with complex legal issues or high-risk employment matters. Their insight into employment tribunals and case law can often provide a perspective that other HR professionals cannot.

As you'd expect, their expertise comes at a premium. Charges are normally based on the time spent advising you, whether that's by phone, email or in meetings.

One tip I'd always give business owners is to prepare before you pick up the phone. Have a clear timeline of events and focus on the facts. That will help you get the most value from the time you're paying for.

Personally, I think every business should know a good employment solicitor, but for most SMEs it makes financial sense to use them alongside another HR support options rather than relying on them for day-to-day HR advice.

So, Which Option Is Best?

The honest answer is that it depends!

Some businesses only need access to a helpline. Others benefit from an outsourced HR partner who gets to know the business over many years. Growing organisations may eventually reach the point where an internal HR function becomes the right investment.

The important thing is choosing an option that matches your business today while also supporting where you want your business to be in the future.

This article wasn't written as a sales pitch. It's simply my perspective after 16 years of supporting SMEs through the good times, the difficult times and everything in between.

I hope it's given you a clearer idea of the different options available.

If you'd like to have an informal chat about what might work best for your business, I'd be delighted to help. Feel free to get in touch: alison@bellhr.co.uk