Fewer than six in 10 small- and medium-sized Irish enterprises invest in a human resources (HR) function, despite the fact 93 per cent believe HR plays a crucial role in business, according to a new survey.

The research revealed 68 per cent of companies that employ one-10 employees have no HR function. More than a third (36 per cent) of companies with 11-50 employees have no HR, with this figure dropping to 29 per cent for businesses that employ 50-250 staff.

The primary reason given for not investing in a dedicated HR professional or outsourced HR service was that companies felt their business was too small (40 per cent), followed by cost (16 per cent). Some 11 per cent of respondents feel they have a good enough relationship with their staff and therefore do not require a HR function.

The survey of 600 SMEs across the country found that technology, communications, banking, manufacturing and finance are the industries most likely to invest in HR, while the hospitality, retail and business service sectors are least likely.

The research, carried out by The HR Department, also revealed that more than a third (35 per cent) of businesses surveyed don’t have a staff handbook.