Lula Highlights Importance Of Workforce Planning In Driving Sustainable SME Expansion

For many small and medium-sized businesses, expansion planning tends to focus on visible and immediate operational needs. But while business owners may carefully budget for premises, inventory, or machinery, they often underestimate the cost, time, and strategic importance of building the right team to support that next phase.

According to Lizanne du Toit, head of people at Lula, this can create significant pressure inside a growing business. “When SMEs plan for growth, they often focus on the tangible things such as space, equipment or stock, but overlook the people side of the equation,” says Du Toit. “To grow sustainably, you need the right number of people, the right mix of skills, and a culture that supports where the business is going. Without that, growth can very quickly become difficult to sustain.”

This is particularly important in South Africa, where SMEs play a vital role as employers and economic enablers.

For business owners, expansion is not only about winning new business, but also about honouring the trust employees place in them when they join the company.

“Employees trust that their employer will not only meet the basics such as salary and working conditions, but also provide an environment where they can grow, contribute and feel valued,” says Du Toit. “Reliable pay is a baseline expectation. But when businesses can also offer recognition, incentives, and opportunities for development, it has a meaningful impact on morale, performance, and retention.”

Poor planning can undermine this trust from both a financial and a people perspective. Businesses that hire too slowly may place undue pressure on existing teams, increasing the risk of burnout, disengagement, and staff turnover. On the other hand, hiring too aggressively against overly optimistic forecasts can leave the business overextended and vulnerable if anticipated revenue does not materialise.

Dylan Weimann, head of Credit Underwriting at Lula, says one of the most common mistakes SMEs make is treating hiring as an immediate fix rather than a strategic business decision.

“One of the biggest mistakes is hiring the wrong person, whether that is the wrong skill set or the wrong attitude,” says Weimann. “You need both. It is also important to remember that a new employee does not deliver at full speed from day one. A businesses’ hiring cycle must include onboarding, training, tools, support, and ramp-up time. If you do not plan for that properly, you risk slowing the business down instead of helping it grow.”

He adds that financial planning and people planning should never happen in isolation.

“For most businesses, salaries are one of the biggest expenses on the income statement. If you are not budgeting properly for your payroll, you are not setting your business or your employees up for success,” says Weimann. “Good growth planning means matching your hiring plans to realistic cash flow expectations, while also being clear about what success in each role needs to look like.”

For SMEs preparing for growth, Lula highlights four practical steps:

1. Plan for people as early as you plan for operations, including headcount, skills needed, and culture fit.
2. Forecast payroll beyond salaries, factoring in onboarding, training, systems access, and time to productivity.
3. Be precise in hiring, with a clear view of the role, the outcomes required and whether specialist or generalist skills are needed.
4. Review team structures as you grow, so that management capacity, delegation and support keep pace with expansion.

Businesses should also watch for early warning signs that growth is becoming strained, including payroll pressure, declining profitability, lower service levels and slipping customer satisfaction.

This Workers’ Month, business owners deserve recognition not only for building companies, but also for carrying the responsibility of supporting jobs, households, and communities.

“SMEs are the heartbeat of the economy,” says Du Toit. “Their impact goes far beyond the business itself. That is why planning properly for people is not a nice-to-have during growth – it is essential.”