Three to five years down the road, you’ve signed a few contracts, hired more staff and your business has started to grow roots.
One of the challenges success brings is managing the increased staff. Adding staff creates a more formal environment, work processes are more cumbersome and internal controls are more complex. You will now need to manage employee relations and performance issues not to mention some of the ‘old friendships’ that may have been affected. This is all in addition to continuing to manage and grow your business.
But what exactly is human resources and why should you care?
Human Resources is the management of all things related to your employees, from the leadership of staff to the organizational structure that supports your company.
You should care because effective HR management reduces the risks associated with the various compliance issues that all organizations face. Compliance with governing legislation and best practices are paramount in ensuring your human resource practices are effective and your costs stay low.
The following 5 areas should be at the top of any small business’ human resources to-do list.
With growth comes the hiring of more staff. Employees who have grown with the company typically do not have the skills to effectively recruit and eventually resort to doing what they think is best, such as hiring their friends or friends of friends. Although the elements of recruiting are rudimentary, having an inexperienced employee hire staff not only puts the organization at risk, it also sends a poor message to candidates. Recruiting should be thought of not only as a need to hire but also an opportunity to sell and market your organization.
One of the most important aspects of effective recruiting is compliance with guiding legislation. To avoid costly fines and improve efficiency, it is important that staff who are conducting the hiring be aware of what appropriate topics of discussion are in an interview. It is also important for them to be skilled and to avoid getting involved in what, at the time, could have been perceived as casual conversation, only later to find out that it was ‘off limits’ and is now a cause for concern from the potential candidate.
Legislative compliance is not the only aspect of effective recruiting. It is also important for your internal process to be transparent to existing staff. In other words, create an environment where they are aware of what is going on and where they can be part of the process, as appropriate. For example, you can supplement your external recruiting with an internal posting process. This would mean posting opportunities internally and creating an internal procedure for handling those who have expressed interest or alternatively have recommended a candidate.
Finally, understanding the information you receive during an interview to see how it compares to the needs and requirements of your vacancy will require practice. Understanding this piece will help you find the ideal fit for your company and avoid hiring just to ‘fill the job’.
- Policies and Procedures
Policies and procedures help to determine the culture of your organization. It is a way of explaining the rules to your staff. Some may perceive this as being restrictive. However, if done well and with an eye on the culture and demographics of your organization, it can be effective in ensuring consistency and clarity throughout the organization. Once the guidelines have been set, downtime usually associated with these matters will decrease, allowing your managers to focus on growing the business and not on nagging internal issues.
When creating your policies, in addition to ensuring legislative compliance, it is necessary to look at what your competitors are doing as well as what the best practices are in your industry. Keep in mind that compliance to legislation usually means you are doing the minimum required by law. Depending on your business and the demand for staff in your sector, you may need to adjust your policies accordingly.
- Management Training
Once the staff is hired and the policies are set, retention may become an issue. The manner in which you deal with employees becomes very important. The majority of managers in small organizations have not been exposed to formal training. Training in management skills, including conflict management, communication and employee relations will help develop your management staff.
As the complexity of your organization grows, so will the human resources issues. It is, therefore, important for your managers to have the skills to deal with these concerns. If managers are unable to handle the day to day turmoil of the organization, retention will become a concern.
Training your managers will not only promote positive employee relations but also empower your managers by giving them the skills they need to do their work. Skilled managers will be able to work more effectively because they are able to deal with the difficult and complex human resources issues in a professional and consistent manner and, as a result, will be able to spend more time on the growth and promotion of the business.
- Performance Assessments
There are many benefits associated with the informality found in small organizations. However, in the area of performance assessments this can be a significant handicap. Informality can potentially lead to a lack of accountability or create an environment where the management staff is not empowered to act. Formalizing the performance assessment process, specifically, providing regular feedback to staff, clarifying expectations and setting goals will create an environment of clear expectations, reduced friction and ultimately lead to increased productivity. It will also ensure communication and regular feedback takes place.
Implementing a system is relatively easy, but to support the system, managers and employees alike will need training and practice on how to make the process work.
Employees who have settled into their roles and look to progress within the company will start to look at compensation. As time passes, employees are able to compare their compensation with others in similar organizations who perform similar work. It is important to ensure you are competitive in this area. A competitive compensation package has many components including salary, vacation time, sick days, bonus programs and other similar perks. As an employer, you should scan your workforce, your competitors, and the overall economic environment to determine the right compensation mix for your organization.
Experience tells us that most entrepreneurs make their HR decisions based on relationships, as opposed to sound and equitable practices. This can set the stage to make things more difficult and complex in the long run. As time passes, this can have a significant impact on the costs of running the business.
Sound guidance as to how to structure various items will create an environment of clarity, reduce queries and conflict, and ultimately improve the bottom line.
Setting up ‘things HR’ does not have to be a scary endeavour nor do you have to do it alone. A seasoned HR professional can assist you with assessing and anticipating your organization’s needs and ultimately reducing significant costs and risks associated with this function over the long term. Our customized services, through Access HR, Virtual HR and HR Project are designed to meet your budgetary and time requirements while helping you to overcome people-system challenges and meet your business goals.
Through our collaborative approaches, innovative HR products and customized advisory solutions we impact four leadership priorities: managing risk, driving productivity, strengthening talent capabilities and supporting your bottom line. Let’s connect to find out how ASSOCIUM Consultants can help your organization.