The provision of human resources and employment advice to small and medium-sized enterprises: The role of small and medium-sized practices of accountants

Abstract

Small and medium-sized practices (SMPs) are often identified as a main provider of human resources and employment advice to small and medium-sized enterprises (SMEs), but little is known about the nature of this involvement. This article explores this gap in knowledge. It examines the type of support provided and resources used by SMPs and how this support role sits alongside core SMP competencies. Nineteen interviews were carried out. The study found an emphasis upon employment procedures and contracts in the support given. The support offered and the resources used were related to the size of SMP. The trust established during the provision of traditional accountancy services was the main reason that SMEs approached their accountant in search of human resources and employment support. The article provides an important insight into understanding how SMEs are supported in this area and indicates several areas where further research is required.

Keywords

accountants SMEs HR employment SMPs

Introduction

It has been demonstrated that accountants are viewed as the most preferred business adviser for small firm owners (Bennett and Smith, 2002; Carter and Mason, 2006; Gooderham et al., 2004). However, much of the existing research adopts a somewhat generic approach to the notion of advice and support. As such, there is a lack of adequate discrimination within the extant literature illustrating the degree to which professional information on financial matters overlaps with offering and brokering more general managerial advice. This article draws attention to this issue, suggesting a need for more nuanced analyses of the role of accountants as ‘legitimate friends’ to small firms. In order to illustrate this argument, the key research focus is upon the role played by accountants in providing business advice on human resource management and employment issues (hereafter HR and employment) for smaller firms – an area quite divorced from their core competences.¹ Consequently, the contribution of this article is two-fold: first, to offer a more informed analysis of the diverse role of accountancy professionals as small firm business advisers; second, it suggests future pathways for research that generate a detailed analytical and empirical frame to create a more sophisticated understanding of the contemporary role of accountants. These contributions are urgent and timely, given the withdrawal of public sources of small firm advice, such as Business Link, which inevitably will increase pressure upon other business professionals to fill this gap.

To develop the analysis, the first section of the article considers previous research on the wider business support role of accountants to small and medium-sized enterprises (SMEs). This is followed by the rationale for focusing upon the accountant’s role in relation to HR and employment support. Finally, the main research questions of the study are located against the previous discussion.

Literature review

Research on the business advice role of accountants has tended to focus on small and medium-sized practices (SMPs) (Blackburn and Jarvis, 2010). Although the term SMP is widely used in the accounting profession (for example, see the International Federation of Accountants; IFAC, 2011), it is not a term commonly used in the small business literature. IFAC has defined SMPs as:

[A]ccounting practices whose clients are mostly SMEs, external sources are used to supplement limited in-house technical resources and they contain a limited number of professional staff. Of course what constitutes an SMP will vary from one jurisdiction to another. (2011: 1)

SMPs as defined by IFAC are the focus of this study, as they have a distinct identity from second-tier and large accountancy organizations (including the ‘Big Four’: PricewaterhouseCoopers, KPMG, Deloitte and Ernst & Young), and their client base consists primarily of SMEs (Blackburn and Jarvis, 2010).

Normally, the initial entrance of the SMP into the SME has been via the provision of traditional compliance accounting services² (Doving et al., 2004). However, there has been a growing interest in SMPs themselves in moving beyond traditional compliance work because of the increasing numbers of SMEs enjoying audit exemption, the changing nature of competition and the effects of technological developments (Martin, 2005). Among the factors which encourage SMEs to turn to SMPs for wider support is the existence of a high level of trust in the relationship (Blackburn et al., 2010; Gooderham et al., 2004), and the fact that both parties have been subject to an extensive socialization process within this relationship (Roslender, 1992). Owner managers tend to trust accountants because of the quality of their work in providing accounting services, and because they are regulated. Both SMPs and their SME clients also emphasize the importance of empathy to the development of successful client relationships and the provision of business advisory services (Blackburn et al., 2010). Unlike other professional service providers, collaboration and interaction with the client is an important part of the process in both audit and non-audit services provided by accountants (Malhotra and Morris, 2009). Therefore, it can be argued that the characteristics of the accountancy profession create a culture that is more favourable to the development of a wider provision of activities than is the case in other professions.

In addition, a number of factors related both to the nature of the SMP and the SME influence the likelihood of developing a wider business support role. The characteristics of those practices becoming most involved in general business advice include having strategic intent, a high proportion of degree-level educated partners, a significant number of non-accountancy professionals who can provide additional services and a larger number of partners (Doving et al., 2004). Moreover, being able to call on a high number of external alliances would seem to facilitate the general business support role. Thus, Blackburn et al. (2006) suggest that accountancy practices can play the role of a hub in a referral network of advisers.

Managing HR and employment issues appears to be an area where there is a strong and continuing need for small firms to receive external support (Berry, 2006; Harris et al., 2008). Smaller firms are much less likely than their larger counterparts to employ HR professionals and, as such, struggle to manage increasing employment regulation (Blackburn et al., 2006), therefore being overly represented at employment tribunals (Saridakis et al., 2008). In addition, they face a range of related HR challenges including resourcing (Berry, 2006; Observatory of European SMEs, 2007), health and safety (Walters, 2001), and training and development (Marlow et al., 2010).

Perhaps surprisingly, SMPs figure prominently among the external sources of support for SMEs in the HR and employment area (Doving et al., 2004). Blackburn and Hart (2002) found that accountants were the most frequently used external body for advice on employment rights. According to the most recent Workplace Employment Relations Survey in 2004, external accountants are an important source of advice on employment issues for private sector managers, with consultations increasing from 14 percent in 1998 to 19 percent in 2004 Indeed, accountants together with the Advisory, Conciliation and Arbitration Service (Acas) were the only two categories of external advice which increased between 1998 and 2004 (Kersley et al., 2006). Given that more small firms than larger companies use external accountants for advice (Forth et al., 2006), it is a reasonable supposition that a significant number use their existing accountants for support in this area.

Studies of accountants have suggested also that they have a support role in the employment area. In their literature survey of business advice provided by accountants, Devi and Samujh (2010) listed human resource management, training and skills development and recruitment as key areas. This is reflected in Blackburn et al.’s (2006) survey of Association of Chartered Certified Accountants (ACCA) members, where the evidence suggested that accountants were interested in developing advice capacity in ‘less conventional areas including employment’ (2006: 30). In the same survey, four out of 10 accountants stated that there had been an increase in demand for advice in relation to employment regulations.

As in the case of more general business support, larger SMEs would appear to be more open to seeking external advice of an HR and employment nature. Larger SMEs have to deal with a broader range of issues such as employment rights simply because they employ more people (Forth et al., 2006). In addition, the profile of the labour force could be relevant. Bacon and Hoque (2005) found that the strongest overall predictor of SME interest in HR was the skill mix of the labour force. SMEs with a higher proportion of low-skilled workers were less likely to have adopted HR practices.

The research questions upon which this study focuses build upon themes we have identified in the literature. If, as researchers have pointed out, we still have relatively little knowledge about how and in what circumstances accountants provide wider business support (Gibb, 2000; Martin, 2005; Martin et al., 2005), our ignorance is even greater in an area apparently so far removed from the accountant’s core competences.

The study considers the following research questions:

RQ1: What support for HR and employment issues do SMPs provide to SMEs?

RQ2: How does the SMP support role for HR and employment issues fit alongside practices’ competences or business activities.

RQ3: What are the resources and practices used to provide HR and employment support?

Method

Sample

A purposive sample of accountancy practices (Zikmund, 2000) was selected, based on two criteria. First, the size of the SMP in particular was considered to be an important variable: previous research has identified the influence of the size of the practice on the business services provided. Second, given the variations in local economy, it was felt important that the study should avoid any regional bias or concentration of respondents, and so practices were identified from a range of English regions. In order to meet these criteria and explore the nature of the support provided, the resources used and the relationship between core competences and wider HR and employment support, 19 interviews with accounting practices were undertaken.

All the 19 practices met the IFAC qualitative definition adopted for an SMP, having a range of partners between one and 25. This range, it was considered, sufficiently captured the variation in the size of practices, including both very small practices with one or two partners and larger practices employing a number of non-accountancy staff (Tables 1 and 2).

Table 1.

Size of practices

	1–3	4–10	11–25	Total
Number of partners	8	7	4	19

Table 2.

Location of practices

	South-East	South/Central	South-West	Midlands	North	Total
Number of practices	8	1	2	3	5	19

The study’s approach limits the extent to which its results can be generalized. However, it does seek to provide sufficient understanding of the issues involved to make more conclusive research possible in the future.

Procedure

Practices were identified by cold calling using the registers of ACCA and the Institute of Chartered Accountants in England and Wales (ICAEW): 60 practices were contacted to obtain the 19 respondents willing to cooperate. The interviews, which lasted between 45 and 90 minutes, were audiotaped and transcribed. The analysis followed the processes advocated by Miles and Huberman (1994). Specific codes were identified related to the research questions and associated themes derived from the literature review. The data were then coded. Commonly coded data were grouped together and evaluated. Narratives were developed from the coded data and compared with original interviews and the literature previously discussed. Interview data are presented to provide an initial and exploratory illustration of the key themes.

Findings

The presentation of findings is structured around the three research questions presented above. The number of partners in the practice is given after each participant’s quote. All participants’ names have been pseudonymised to protect their anonymity.

Support provided to SMEs

The most frequent type of support provided to small firm clients by SMPs was in relation to HR procedures, contractual obligations and employment legislation. Clients typically needed help in deciding how to take someone on, how to deal with an employee who is being difficult or how to make someone redundant. Therefore, most practices provided advice and support to clients in relation to issues related to employment and contract law. Although the advice was well outside the core competences of accountants, it still involved them in the familiar role of ensuring compliance:

They ring and say … I’ve got this employee . … I want to get rid of him. We would sort of say: ‘Hang on, you can’t just dismiss them, there are various procedures you have to do, various warnings, written warnings, etc.’ – give them a rough outline of what they need to do. (Susan, accountant, Reading; 4 partners)

This interest in procedures and legal obligations displayed by SMEs is consistent with other research which has emphasized the concerns of small firms in this area (Bacon and Hoque, 2005).

Initially, the nature of support sought by clients could be described as ‘common sense’ advice rather than specific legal advice, as illustrated by one practitioner:

They don’t consider I will advise them on how to deal with a tribunal. What they are looking for is: if this happened to you, how would you deal with it? It is a common sense discussion about an issue. (Sarah, HR professional, Manchester; 2 partners)

Other areas of support provided included advice on recruitment, succession planning and reward. In relation to recruitment the respondents, particularly in the case of the larger SMPs, indicated that they were often involved in recruiting clients’ financial staff and might advise clients more generally on possible sources of recruitment.

The nature of the support provided was influenced by the characteristics of the practice and the client. Smaller practices, with between one and three partners, tended to provide less support. Taking redundancy as an example, these SMPs generally felt comfortable about indicating the procedures to be followed and the potential costs involved, but did not tend to become involved in the detail of individual disputes between clients and employees. However, as suggested by Blackburn et al. (2010), there were mixed self-perceptions of their expertise by SMEs and therefore the level of involvement varied. For example, in two cases, practitioners from smaller practices accompanied clients to meetings with specialists (e.g. Acas, employment solicitors), while others were more passive.

Middle-sized SMPs (four to 10 partners) tended to be more involved in providing detailed advice on basic employment issues: for example, statutory sick pay, minimum wage, disciplinary and grievance procedures. They suggested that this resulted from their role in managing client payrolls. Invariably, as a part of this support they kept clients updated on changes in statutory legislation and regulations. Such SMPs tended to have one or more members of staff with a lot of experience in the HR area.

There were five practices that employed HR-qualified staff. All except one of these were larger practices with more than 10 partners, the exception being a practice with eight partners which had established a 50/50 joint venture company with an HR consultant. They typically offered support in employment procedures, contracts, discipline and grievance as well as recruitment. The support was provided either on an ad hoc basis, or on an ongoing basis in return for a fixed monthly or annual payment.

On the demand-side, SME clients were not all equally active in seeking HR and employment support. The smaller the firm, the more likely limited advice was sought. Thus, the type of firm most likely to seek advice was the bigger small firm employing more than 20 employees, reflecting the findings of Gooderham et al. (2004). These firms tend to have a range of HR problems but are not big enough to employ a HR specialist, or formally outsource to a specialist HR organization. Although in general there was no distinctive pattern by sector in the frequency and nature of advice provided by the practice. Smaller blue-collar businesses (e.g. construction industry) were less likely to see the importance of needing advice, echoing Bacon and Hoque (2005).

It was difficult to be precise about the frequency with which HR and employment advice was sought. In the case of those practices with HR qualified staff or with payroll services, requests for advice were frequent. In the case of the other providers, there was a variety of responses from ‘not very frequently’ to ‘all the time’.

Relationship of the support role to accountants’ core competences

The respondents emphasized that SME clients approaching them for HR and employment support did so because of the trust that had developed in the relationship from their experience of the Successful provision of traditional accountancy services. Trust has been previously noted by other researchers as a key variable in the extension of the accountant’s support role (Blackburn et al., 2010; Gooderham et al., 2004). Although HR and employment issues are more distant from the accountant’s core competences, the trust already established explains SMEs’ willingness to approach their accountant for support in this area:

They trust us and have confidence in us – I have clients here for over 30 years. The reason they come and talk to us is that they trust the advice we give them, and if there is not something in that, we may as well pack up. (Peter, accountant, Surrey; 2 partners)

The importance of trust in a decision about where to seek advice on HR and employment issues perhaps is not surprising, as it is an area where values are of major importance. Successful recruitment is about finding the right fit between a candidate and the values and culture of the organization as much as about their skills and knowledge (Heneman et al., 2000; Marlow, 2006). Achieving value congruence with any external agent is also very important (Klaas et al., 2000). The trust established through compliance work gives the accountant a big advantage in this respect: an advantage that is enhanced by small firm perception of the accountant as a peer – a business partner who therefore experiences similar HR and employment problems:

If there is an issue they discuss this with us as a businessperson, for example, what would I do if I was in their shoes? That’s really the issue here. (Bob, accountant, Middlesex; 2 partners)

In understanding the small firm recourse to asking the accountant for support, it is important to bear in mind the small firm’s limited resources for networking externally (Curran et al., 1993; Watson, 2007). Therefore having ‘plugged in’ to the accountant because of the latter’s compliance role, resource factors encourage the small firm to return to them for other kinds of support.

It was the smaller accountancy practices (one to three partners) particularly which expressed least confidence and most caution about giving HR and employment support because this was so far outside their core competences. There was concern about their business reputation when they moved away from their traditional offerings:

Threat of litigation is a constraint … a growing worry… insurance. (Marie, accountant, Swindon; 3 partners)

The major problem is not being sucked into giving advice beyond our level of competence – you just have to keep reminding yourself you are not an employment lawyer. (Frank, accountant, London; 2 partners)

Reflecting this caution, the smaller practices did not actively promote the provision of support in the HR and employment area. Rather, this provision tended to be client-driven and reactive. New clients were picked up because they wanted tax and accountancy advice rather than HR.

Nonetheless, even the smaller practices in most cases felt obliged to respond to client demand for HR and employment support. Unlike the respondents in Blackburn et al.’s (2010) study, they did appear willing to move beyond their traditional expertise to a degree. This was not in search of higher value activities (Blackburn and Jarvis, 2010) but because, given the competitive nature of the market in which they operated and with demand for their core competences declining, they did not feel able to ignore client pressure. They had to engage in some dialogue with their small firm clients about their problems. As Bulukin et al. (2005) note, this is a way of keeping clients ‘locked into’ the practice and meeting their clients’ expectations of the business relationship. The key issue for smaller practices was to be clear on how far they should sensibly go in this dialogue – this made them selective as to the advice given:

Employing people … that is where we speak from knowledge … We have done the research ourselves and taken advice. Grey areas we would refer. (Stuart, accountant, Birmingham; 5 partners)

Notwithstanding sentiments of insecurity in some cases, smaller practices’ willingness to discuss and become engaged in their clients’ wider business problems provides evidence of the lower level of jurisdictional control practised by accountants and the greater importance of the relationship established with the client in comparison with other professions (Malhotra and Morris, 2009). This was more evident in the case of the larger practices. For them, involvement in HR and employment support was seen as a natural development from core accountancy competences:

Absolutely, we should be doing it – it is a business need, we are accountants. We are there to answer our client’s business requirements. (Paul, accountant, London; 17 partners)

These SMPs were building on competitive advantage:

Our clients can shop around for any HR package if you like, but we are in a unique position: they are already in-house, they already like our service, we know their business. (Paul, accountant, London; 17 partners)

I am actually seeing a client this afternoon straight after this, with Tim [a partner]. They were coming in to see him and there is obviously something going on – a restructuring with HR implications – and so I am going in with him. (Sarah, HR professional, Manchester; 25 partners)

Resources used to provide HR and employment support

Size was a key factor influencing the nature of the resources that practices used to provide HR and employment support. The large practices (more than 10 partners) tended to employ qualified specialists to provide HR and employment advice. Middle-sized practices (four to 10 partners) involved in providing payroll support had experienced staff working in payroll who were accustomed to dealing regularly with requests for advice on employment issues.

In the absence of HR specialists and non-accountancy staff, the other practices employed a range of resources to help them support clients. Most respondents stressed the importance of experience residing in the practice as a result of dealing with clients in the past, and of handling internal HR issues. From this experience, practitioners considered that they had built up a wealth of knowledge and often a bank of documents relating to contracts of employment and procedures which could be used as templates for their client use. This experience might be supplemented by the use of online resources: for example, Croner’s Employers’ Electronic Guide to keep up-to-date with legislation. In addition, training was mentioned by some respondents: for example, attendance by practitioners at sessions on employment law.

However, practices – particularly small practices – often found that their clients’ HR and employment problems fell outside their own comfort zone. Typically, a practice would draw their clients’ attention to the existence of procedures, but in cases when applying these procedures was required – for example, a selection issue for redundancy – the accountant would turn to a variety of informal and formal external agencies and alliances from which they could seek specialist help, or to which they could refer clients. Thus they act as the hub in a referral network of advisers (Blackburn et al., 2006). These agencies and alliances included local solicitors specializing in employment law whom they could ring for advice, or to whom they could refer clients. One practice contacted an HR professional in one of its client companies. More formal arrangements existed in relation to specialist HR helplines and consultants. In most cases the practices did not make any direct income from referring clients to HR support services: they were doing their clients a good turn and receiving credit for it. However, there were exceptions: two practices had formed joint companies with HR consultants. In one case, as part of their annual fee to the practice, clients were given access to a helpline giving free legal advice on employment issues. The practice subscribed to this service as part of its professional indemnity package. Integrating this service into the practice’s overall offer was seen as a useful marketing tool when talking to potential clients, and enabled the practice to increase its annual charges.

The practices with qualified HR specialists were more able to rely on internal resources to give support to clients. These specialists used the professional body, the Chartered Institute of Personnel and Development (CIPD), including its programmes of continuing professional development, website and branch meetings, for their own support. They also tended to have an informal network of HR and legal contacts that they could tap into from previous HR roles. However, there were some occasions when these practices used external agencies, such as employment lawyers, to represent clients at tribunals.

Conclusion

The research discussed in this article explored three questions: ’What support for HR and employment issues do SMPs provide to SMEs?, ‘How does the SMP support role for HR and employment issues fit alongside practices’ core competencies or business activities?’ and ‘What are the resources and practices used to provide HR and employment support?’.

In the view of the SMP respondents it was the trust that SMEs had in their accountant which explained their willingness to approach them for HR or employment advice. This trust had been built up in previous interactions with the accountant in the course of the latter’s traditional compliance role. It is a testimony to the strength and depth of that trust that it held in the case of HR or employment advice: an area so divorced from the accountant’s core competences and one in which, as pointed out previously, value congruence with any external adviser is all-important.

The analysis of the demand and supply of HR and employment support provided by SMPs to SMEs supports previous research that SMEs lack confidence in dealing with employment regulation (Blackburn et al., 2006). The SMP respondents indicated that clients typically needed help in deciding how to take someone on, and how to deal with employment issues such as making someone redundant.

Most respondents emphasized that the expertise and experience developed in the past in dealing with HR or employment issues, both within the practice and for clients, were of considerable help in their support role. Nonetheless, the confidence with which the SMP responded to the demand for support, the way in which they met this demand and the significance attached to it, varied considerably. The variation in the provision of HR and employment support was related to the same variables identified by other research in respect of the more general business support role of SMPs (e.g. Doving et al., 2004): that is, the number of partners in a practice and the number of non-accountancy professionals employed.

The smallest practices (one to three partners) were those which expressed most caution about becoming deeply involved in the HR and employment area. They saw a need to respond to demand but they did not display any desire to develop the business in a new direction, and referred clients on for more specialist advice when consulted on situations with which they were not familiar. The larger practices (more than 10 partners) tended to employ qualified HR staff and were moving towards providing a ‘one-stop shop’ for business advice, taking advantage of more traditional practitioner–client relationships to develop the HR and employment area. Their employment of qualified HR staff gave them the confidence to actively promote HR in the same way as any other strand of business support. In between the larger and smaller practices were a number of practices of middling size (four to 10 partners) which had developed a payroll service for their SME clients, out of which an HR and employment support role had emerged.

Implications of the study and directions for future research

This exploratory study has a number of potential policy implications for both professional bodies and government agencies. However, further research is needed to underpin these implications and develop policy with confidence.

As far as the accountancy professional bodies are concerned, the study points to implications for continuing professional development and the ethical and liability advice given to members. In relation to continuing professional development, it would be unwise for professional bodies to invest in significant additional support for their members in the HR or employment area without further research. The study suggests that the response of SMPs is far from homogeneous, with some becoming involved in this area of support quite reluctantly, and others embracing it as an opportunity to expand their service. More research is needed on how accountants become involved in providing this support to SMEs, why particular SMPs develop their support role differently, how strategic or reactive this development is, and how driven it is by the specific market context in which practices are operating. Not least, evidence is needed on the impact of this support on SME decision-makers and their perception of their accountant. In light of such research, professional bodies are likely to gain a better understanding of the process whereby their members engage in the area and the implications for their practices. This will enable professional bodies to make a more considered decision on the appropriate balance between developing continuing professional development for members, and focusing on a more nuanced approach, which recognizes that while practices seeking to expand in the area would benefit from more substantial continuing professional development. This is unlikely to be an option for many smaller practices. Smaller practices tend to refer their clients to specialist consultants in a network, when faced with a client query they consider to be beyond their competence. These smaller practices obtain little income from this brokerage role, and appear to have little knowledge about consultants’ effectiveness in supporting their clients. The provision of more continuing professional development in HR or employment issues for this group might be wasted, pushing them in a direction in which they do not want to go. Further research on the effectiveness of the referral process and its potential to be developed into a brokerage model which could give income to the smaller SMPs as well as value to SMEs, might facilitate the development of a policy more sensitive to the needs of this group, and help compensate them for the decline of traditional accounting services.

The study also raises ethical and liability issues for professional accountancy bodies. The involvement of members in providing advice to clients so divorced from their professional competence suggests the need for professional bodies to review their provision in this area, and establish a framework of guidance reflecting member involvement in new areas and taking their anxieties into account. However, potentially it also raises more fundamental issues. The greater involvement of SMPs in non-traditional activities might be expected to have some impact upon the culture and identity of the practices themselves. It is pertinent to ask, in the case of those practices engaging actively in the expansion of services, what impact this has upon the identity of practices. To what extent does the accountancy identity of practices become eroded? What impact does this have upon power and status of accountancy professionals within the practice? Further research is needed to examine these questions which could present significant challenges to the profession and its influence in the longer term.

The research is also likely to have implications for the CIPD. Its findings have identified three groups of non-accountancy staff as being involved in providing HR or employment support to SMEs: an increasing number of HR professionals in the larger SMPs; HR professionals in specialist consultancies; and a group of non-professional staff employed by SMPs, often in association with the payroll function. At the moment the needs of these groups are not reflected in CIPD syllabi, membership or support activities – all of which currently remain very much geared to the needs of professionals in larger organizations. More understanding is required by the CIPD of the role of these groups, the problems that they face and the perceptions and expectations of them held by SME clients. Such research would enable the professional body to develop appropriate syllabi.

Turning to consider the possible implications for government policymakers, the analysis suggests that accountants could be useful sources of intelligence on SME behaviour in the employment area, and could have an acknowledged role in facilitating the implementation of government policies in this area. Discussion of public policy for SMEs is often thwarted by the inadequacy of data on small firm behaviour, leading to the development of less-than-helpful stereotypes and generalizations that do not capture the diversity of SME behaviour and activities (Drucker et al., 2005). This can be particularly problematic in a sensitive area such as employment regulation. In addition, we have noted the similarity between the compliance work in traditional accounting services provided by SMPs to SMEs, and the advice and support that they give to SME clients in employment rights and obligations – another area of compliance. This similarity made the accountant more comfortable in responding to client demands in the employment area. Therefore, the accountant’s role could be built into the implementation of regulatory policy in the SME sector, and relevant briefing and support made available.

However, these policy implications need to be confirmed by further research. They are based on the assumption that the involvement of SMPs in providing HR or employment support revealed by the data is repeated in the SMP population as a whole. Future research is needed to test this in the form of a larger scale survey, which could provide a stronger basis for generalization. Moreover, the policy implications are based on assumptions about the impact and effectiveness of the accountant’s role on SMEs; therefore, it is very important to investigate SME’s perception’s of accountant support. The existing research suggests that the advice provided by accountants (together with that of customers) has the greatest impact upon SMEs (Gooderham et al., 2004), but it does not disaggregate the advice in question into different areas. Exploring the impact of accountants’ HR or employment support on SME behaviour, whether the trust that SMEs have in their accountant is as strong in relation to HR or employment support as in more traditional areas and their degree of dependence on it, are all important areas for further investigation. The evidence from such research would make a significant contribution to confirming the validity of the government’s emphasis upon the importance of the private sector in providing support to SMEs (Department for Business, Innovation and Skills, 2010), and also suggest how this private sector role might be best exploited by policymakers, at least in the case of accountants.

Finally, the study does point to a possible contradiction in current government policy. An increased emphasis has been placed on the use of websites as sources of support or information on regulations for SMEs (Rouse and Sappleton, 2009). In the area of employment regulations, the present study would suggest caution in this respect. SMPs reported that SMEs came to them because of the trust that they had in their accountant, their ‘all-purpose’ availability and the personalized nature of their support, which addressed problems from the SME’s point of view (a view from which the government is unlikely to dissent). Websites are unable to offer this kind of support, and therefore their take-up and impact may be limited.

Footnotes

Funding

The research fieldwork reported in this article was funded by a research grant from the Certified Accountants Educational Trust.

Notes

Robin Jarvis is Professor of Accounting at Brunel University and Special Adviser to the Association of Chartered Certified Accountants (ACCA). His refereed publications and research interests are centred in the area of accountancy and small business management. He is a member of a number of journal editorial boards including the International Journal of Business Excellence, Journal of Small Business and Enterprise Development and International Small Business Journal. He was previously Head of SME Affairs at the ACCA.

Mike Rigby is Director of the Centre for International Business at London South Bank University. His refereed publications and research interests are centred in the area of comparative employment relations, and recently have included papers on mediation in collective disputes, union interventions in work–life balance, and the establishment of enterprise works councils. He has acted as a referee for a range of academic journals and funding bodies including the ESRC and the Nuffield Foundation.

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