Introduction

The SME market in South Africa, although not new, is very large and continues to grow, and is crucial to labour absorbing GDP growth, and more importantly, job creation. It is fundamental for the future growth of the SA economy and is the area where Government is focusing all its attention and incentives. Consequently, Government strategies rely on strong growth in this sector. The biggest challenge facing Government is the provision of a macro-economic framework that stimulates managers to maximise the return on assets under their stewardship. But what is the major business challenge facing all SME owners?

The Business Challenge - Job Creation and People Management

Any form of business beyond a sole proprietor or partnership requires people. As business owners take risks and work hard, jobs are created. The moment people are taken on and utilised in the business, the management of people becomes the critical success factor. The cliché is often heard "People are the most important asset". But how is this common cliché realised by the business owner? More importantly, a successful business needs the right people, at the right time and all doing the right work in order to meet the overall business objectives. The wrong people can do significant damage and even kill the business. Sadly, the right people badly managed can also be detrimental and cost millions in lost opportunities.

Web of Legislation

Whilst the Government is trying to stimulate economic growth, it has created a complex web of labour market policy and legislation that has made the management of people a daunting task, to say the least. It has attempted to get rid off mass unemployment, poverty and crime through a contradictory approach of "regulated flexibility' and improved remuneration i.e. more and better jobs.

SME's are therefore subject to employment legislation such as the Labour Relations Act, the Basic Conditions of Employment Act, the Employment Equity Act, the Skills Development Act, the Unemployment Insurance Act, the Compensation for Occupational Injuries and Diseases Act, the Occupational Health and Safety Act, the Guidance and Placement Act, the Aliens Control Act, the Income Tax Act and statutory Bargaining Council Collective Agreements.

In order for small business owners to successfully operate within this complicated legal web, professional and cost effective HR advice is necessary and desirable. Many opportunities are lost simply because the business owner is unaware of the framework, for example, skill development grants (which in all probability pay for the HR advice and services).

Many SME's find it too costly to hire someone to manage this and other non-core functions themselves, and they tend to fall by the wayside or get managed inefficiently. Others simply don't see the benefit of outsourcing, preferring to struggle along on their own, instead of relying on the experts and allowing themselves the time to focus on core issues, asking for help only at crisis point.

Research based "Best of Breed"

In order to provide creative people management solutions, it is important to focus on researching HR service providers in order to identify, select and deploy "best of breed" solutions for the benefit of your company. This focus on thorough research introduces a unique approach to human resource management and is a competitive advantage. Human Alliance's team of HR Specialists, for example, is able to draw on the research, provide the best solutions to their clients and switch HR service providers if their performance and delivery falls off. This approach relieves the business owner of pondering around looking for the right HR solutions - often selected in a haphazard way and costing more time and money than is necessary.

HR Specialists

Human Alliance is proud of its team of highly skilled HR Specialists who have had extensive experience in most sectors of the SA economy. In order to provide a cost-effective HR service to small businesses, our HR Specialists are personally assigned to Clients and depending on the service levels required, are based on the Clients premises (for example, for 1 day a week). The added value is the availability of the whole Human Alliance team when this is necessary (e.g. strike).

Conclusion

We are currently in a climate that is continuously restructuring itself by outsourcing non-core activities - a trend which is beginning to gain momentum in South Africa. Most small businesses do not have the expertise, time or experience to manage these activities themselves, yet often ignore the opportunities that outsourcing offers. Outsourcing non-core business activities such as HR, Payroll or Administration allows the small business owner time to focus on growth rather than administration. Makes sense.

Kevin is the Managing Director of Human Alliance. For more information about Human Alliance's offerings, click on the Services button at www.h-alliance.com

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