How SMEs Can Fix Costly HR Gaps and Boost Employee Value

In the first two parts of this series, we uncovered a hidden drain on SME performance: employee underutilisation. We explored how to identify the signs of underutilisation in the first blog, and how to calculate the financial cost using 9 key HR metrics in the second blog.

If you’ve gone through the audit and done the math, one question likely remains:

Now what?

This post covers practical, high-impact steps you can take to address each area where value is being lost—and turn your HR metrics into strategic growth levers.

1. Fixing High Employee Turnover

Metric Refresher: Turnover Rate + Cost per Hire

What to do:

  • Conduct structured exit interviews to uncover the real reasons people leave.
  • Invest in onboarding and coaching for the first 90 days.
  • Offer career development plans, even for small teams.
  • Introduce regular feedback loops, not just annual performance reviews.

Tip: Employees often leave managers, not companies. Upskill your leaders in people management.

2. Reducing Absenteeism and Boosting Engagement

Metric Refresher: Absenteeism Rate + Engagement Score

What to do:

  • Launch simple engagement surveys (use free tools like Google Forms or SurveyMonkey).
  • Tackle quick wins first: flexible hours, clear goals, fair workload distribution.
  • Address burnout by encouraging real rest and normalising mental health days.
  • Recognise performance often – informally and formally.

Tip: Engagement isn’t about perks; it’s about purpose and recognition. Read more about what employees want.

3. Balancing Workload to Avoid Overuse and Underuse

Metric Refresher: Overtime Costs + Revenue per Employee

What to do:

  • Conduct a time audit across teams to identify imbalances.
  • Automate repetitive tasks or redistribute responsibilities.
  • Consider job enrichment strategies: add variety and ownership, not just volume.

Tip: Overuse leads to burnout; underuse leads to boredom. Both are costly.

4. Maximising Your Training Investment

Metric Refresher: Training Investment per Employee + Time to Productivity

What to do:

  • Focus training on immediate performance gaps and future needs.
  • Use low-cost platforms like LinkedIn Learning, Coursera, or in-house mentoring.
  • Track knowledge transfer and performance improvements post-training.
  • Involve team leads in identifying training priorities.

Tip: Training without follow-through is just an expense. Make sure it links to goals. Read more on training and development ideas.

5. Creating More Internal Mobility

Metric Refresher: Internal Mobility Rate

What to do:

  • Advertise internal opportunities—even in small teams.
  • Cross-train employees to build versatility.
  • Include stretch assignments in development plans.
  • Create “talent roundtables” every quarter to discuss internal moves.

Tip: Employees don’t need a promotion to grow—they need a challenge.

6. Improving Time to Productivity

Metric Refresher: Time to Productivity

What to do:

  • Streamline onboarding with clear 30-60-90 day goals.
  • Assign buddies or mentors from day one.
  • Give early feedback—not just after probation. Let performance feedback become part of the culture of the company.
  • Provide access to tools, systems, and people before day one.

Tip: The first 90 days define long-term success. Make it count.

7. Improving Revenue per Employee

Metric Refresher: Revenue per Employee

What to do:

  • Link individual KPIs to business outcomes.
  • Increase visibility of goals across departments.
  • Hold regular team retrospectives to find productivity leaks.
  • Identify and scale your top performers’ practices.

Tip: Revenue per employee rises when roles align to strategy—not just tasks.

8. Optimising Recruitment Spend

Metric Refresher: Cost per Hire

What to do:

  • Audit where your best hires came from and double down on those channels.
  • Reduce agency spend by building in-house talent pipelines.
  • Pre-screen effectively with structured interviews or assessments.
  • Improve retention so you don’t need to hire so often.

Tip: The cheapest hire isn’t always the best—it’s about long-term fit.

Final Thoughts: Don’t Just Measure – Manage

Metrics are just the beginning. What transforms an SME from reactive to strategic is turning insight into consistent action.

Let’s recap the 3-step process:

  1. Identify underutilisation through observable signs and audit checklists
  2. Quantify the impact using financial formulas and HR metrics
  3. Rectify inefficiencies with targeted actions in hiring, engagement, development, and operations

By addressing gaps in how your people are used, developed, and appreciated, you’re not just improving HR—you’re growing your bottom line.

Are you ready to implement an effective HR function for your business? Let’s help you design it.

About Competence SA

Competence SA identifies, develops, and enables potential through the provision of the following services:

Contact us at hello@competencesa.co.za or 082 853 7456

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