Government should invest £13 million to support small firms


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A report from the CIPD and JP Morgan suggests productivity would be improved if the government took action

The government needs to invest £13 million a year to provide HR support to small businesses. This would help improve the UK’s flagging productivity, according to research from the CIPD supported by JP Morgan.

The call for action is based on the evaluation of year-long ‘People Skills’ pilots providing HR support for SMEs in Hackney, Stoke-on-Trent and Glasgow. Developed by the CIPD with support from JP Morgan through the JPMorgan Chase Foundation, it provided up to two days’ worth of free HR support to small firms, including face-to-face advice, a telephone helpline, online information and templates, as well as group training events.

Ben Willmott, CIPD head of public policy, said the programme shows the potential benefits of targeted investment to improve small firms’ people management capability through co-ordinated, high-quality, locally-delivered business support.

“If policymakers are serious about addressing the UK’s longstanding productivity deficit – particularly among the nearly 1.3 million small businesses that employ between one and 50 people – then they have to start seriously thinking about how to improve management quality, which the Bank of England’s chief economist Andy Haldane has identified as a key area for focus,” he said.

Hang Ho, EMEA head of the JPMorgan Chase Foundation, said small businesses are very important to the UK. “Small business success is an essential element of the UK economy and a critical component in creating thriving local communities,” she said. “Today’s report shines a light on the importance of basic HR practices to the success of small businesses; whether that is improving productivity, boosting the effectiveness of the management team, or handling crises.

“While we hope the People Skills pilot will benefit participating companies in the long term, the findings clearly also demonstrate to policymakers a real need for HR support among SMEs.”

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