According to the Federation of Small Businesses, the number of UK SMEs have grown hugely in the past decade which is encouraging to see. The number has risen from 3.5 million in the UK in 2000 to 4.5 million in 2011.

This points towards a positive future outlook for SMEs, as the recent recession has hit these kind of businesses particularly hard. Often lacking access to cash and capital, SMEs are also more likely to suffer from a lack of management experience and breadth of expertise that can be found in larger enterprises.

But if SMEs are to fulfil the role assigned to them as drivers of the economic recovery, then an alteration in outlook is needed; businesses need to stop thinking about just surviving and start to innovate and grow while still squeezing the maximum benefit from every available resource.

Shift from a ‘survive’ to a ‘strive’ mentality

A focus on the short term can be catastrophic for a business, regardless of size or industry, trying to grow but failure to plan is a classic pitfall for SMBs.

It’s easy to see why so many businesses fail to look ahead adequately. For SME owners who often have responsibility for more than one aspect of the business (HR, Finance, IT) it can be a challenge to set aside time to plan as it often means time spent away from driving growth and adding to the bottom line.

The process of writing a plan allows the consideration of all aspects of the business, from competitors to staff, products and services, current and future markets. It enables the analysis and examination of how changing one area of the business might affect others.

The importance of an engaged workforce

Given the close-knit nature of SME teams, strong relationships built on effective internal communication is fundamental to success. It’s no secret that an open and collaborative business environment automatically leads to better behaviour in the workforce and greater employee engagement.

Employee engagement is something that many businesses are currently investigating and seeking to improve. Employees work best and most productively when they are engaged in the business and feel they are working in a culture of fairness, transparency, with good two-way communication. They often want to be involved in business decisions then and if they feel consulted, they are likely to make an extra effort and believe that they can make a real difference to the long-term business goals.

Adding to this sentiment, a recent report from management consultancy Hays found that UK businesses need to do more to engagement staff or risk losing their most talented staff. The study was based on a database of more than 400 organisations across 46 countries, representing 6.7 million employees. Despite an improvement in the last 12 months, employee engagement in the UK in still only 65 per cent, while more than a quarter said they would not do more than their job responsibilities ask them to do.

More on human resources:

• The emergence of zero hour contracts – and their worth for SMEs
• How incentives and rewards can motivate staff to go the extra mile
• Employee shareholder contracts: How will shares for rights work?

For many businesses the solution lies in making the shift away from manual or paper-based HR/workforce processes to automated systems. A comprehensive workforce management solution that takes in time and attendance, human resources, and access control is no longer the sole preserve of a large enterprise; it can rapidly deliver value to a small business.

The benefits of such a service include improved workforce productivity and lower labour costs. In fact, organisations with automated time and attendance solutions achieved 12 per cent greater workforce capacity utilisation than those with manual time and attendance processes (according to Aberdeen Group research).

Fuel growth in all areas of the business

Many small businesses are searching for ways to grow, as Europe begins to recover from recession. It is essential that effective employee management is in place to enable this growth and a robust plan that considers all aspects of the business. It needs to engender an open and collaborative working environment, where employees feel esteemed and implicated in the business’ success. This is a good place to start and should be taken seriously by SMB owners looking to prosper in today’s economic climate.