Human Resources is commonly becoming accepted as a strategic business partner, worthy of a seat at the highest levels of leadership within many organizations. With the advent of social networking, and new digital technologies, human resources specialists are now expected to not only deliver value, but to deliver it at a faster pace; often with a global reach.
While many small business owners don’t start out with the intention of facing human resources issues, once they start hiring staff, and managing additional people within their business, they often find themselves reacting to HR situations (which can sometimes slow down business growth). Taking the time to be proactive, and carefully considering human resources needs now, and in the future, will go a long way to keep your business ahead of the game.
However, even in the most proactive organizations, HR issues arise and need to be resolved on a moment’s notice. That’s simply the nature of dealing with people. By taking time in advance to create or acquire tools, policies and programs – being proactive – small business owners can often reduce those moments of needing to be reactive.
Many small business owners are busy. Really busy. They’re addressing the day-to-day issues that arise when running a business. However that means they’re not able to spend the time planning for, and assessing, future business opportunities, and the human resources and talent management needs that those opportunities will bring. Taking stock of those needs in advance means better decisions later. This step also prevents burnout, mistrust, and disengagement of your current team because you’ve planned to staff appropriately. Businesses that effectively plan often have lower turnover rates, better capabilities, and better employee engagement.
This planning step can also affect the bottom line. Staffing levels are closely tied to budgets (i.e., compensation and training of staff). From a financial risk management perspective, this is critical to the financial success of the company as it grows.
Consider rolling interview cycles
You likely have a pool of applicants most of the time, even when you’re not actively posting an opening. Review the list periodically, and consider holding rolling interviews with those whose experience or skills are of interest. Keep the others on file in order to try to minimize the need to post for future roles, anticipating the areas where you may need to staff to meet a need, and to maintain productivity.
If you are a small business owner without a dedicated HR resource or department, you might be concerned about having to fund strategic and proactive efforts. By starting with a mix of both tactical and strategic steps, and keeping a close eye on when and how you’d like your business to grow, you’ll be much better prepared to not only focus on and address any current issues as they arise, but any future staffing needs, successfully.
Eight solutions to common small business HR questions
Small business owners have a lot on their plate – from balancing sales with production, to managing cash flow. Often, the business of dealing with employees is reactionary – hiring based on an immediate need or addressing performance issues as they arise. Taking some time to plan for these and other potential HR issues in advance may even help small business owners more effectively run the day-to-day.
1) When trying to be more proactive about building or expanding a human resources function, what are some common considerations?
First, it’s important that your trusted HR resource understands your business, and your business goals just as well as you do as a business owner. They will be your biggest champions and supporters – even when it comes to staffing issues you’d rather not have to make decisions about.
In addition to the responsibilities around recruiting and talent management, your HR resource should be part of financial, marketing, and sales forecasting meetings. This will help them better understand where the business is at in all these areas. It will also make it easier for them to lead the forecasting, creating, and maintaining of compensation, benefits, training, and recruiting budgets.
2) How do I set my HR priorities? There’s so much to do.
When building your HR practice, do so on the basis of what really works, not on what is currently popular (and often ineffective). Be sure to always look at the bigger picture or long-term plan. Stick to the basics first: attraction and retention strategies that will save the company money in the long term. Over time, consider offering bonuses that are linked to: company sales, productivity goals, individual sales targets, or other priorities for your business. These can be self-funding investments because the cash flow generated from achieving these goals will help pay these bonuses. And they’ll keep staff motivated and engaged (as long as the goals are measurable and achievable).
3) I have a limited budget. What are the H.R. areas I should focus on?
Working with limited resources and smaller budgets isn’t uncommon in small businesses. HR can work with you, and determine where to allocate the budget to stretch the dollars to provide the most ‘bang for the buck.
Start with what really counts to both your business and your employees. Offering a few well-structured programs is likely best. While there are a lot of options out there, some of the more popular programs include:
· Competitive compensation
· Flexible work agreements
· Bonuses and rewards (linked to objectives)
· Benefits (health, dental, pension, etc.)
· Succession plans
· Wellness plans
Choosing those that matter to your business in the near-term will allow you to consider how to scale your offerings as the business grows. Your HR resource can help you determine where and how to scale, and what will make the biggest impact. Not only that, they can help you find free resources or programs that can help you be competitive. There may also be grants and programs which you may qualify for depending on your industry and who you’re looking to hire.
4) How do we “keep it together” as we grow?
Share, share, share! If you’re sharing information, educating your employees, and providing a platform for productive business discussions, it creates bonds among your team. Keep key employees and/or management teams informed on issues that may affect your business such as competitive, local or global issues. It will make everyone feel like they’re part of the company’s growth. Creating mentoring programs with senior team members to help foster more junior talent, and make them feel like part of the team can help with continued learning and team growth. Administering employee surveys as you grow can also provide insight into how your team is feeling – a lack of response to a survey can provide insights into the level of trust and engagement in their roles and the business.
5) We have job descriptions for each position and individual, but we are introducing new technology, new territories, new complexities. How do we manage these with our existing and new employees?
As your business grows, and hiring needs increase, you and your managers must be clear about which talent issues are critical to support the growth of the organization. It’s important to encourage ongoing discussions and be frank about the competencies and skill sets the business needs to move forward. Consider engaging your HR resource to do a gap analysis on your current and future hiring needs so that you’re aware of where you’re at, and what you need to add to continue growing.
6) What is the key ingredient to make it all work?
Passion! Fostering a culture that encourages passion will be positively contagious not only to your employees, but also for your partners, clients, potential candidates, vendors, suppliers and investors. Passion should be introduced at every stage, and every level, of an organization. It is anchored on the idea we can all be teachers and learners, we face challenges individually and together and we should be cooperating with the true intention of continuously improving ourselves and the company. This creates internal and external value and greatly shapes the company culture, especially as you scale and are in the market to attract new talent.
7) What strategic area of focus should HR consider on an ongoing basis?
Human resources is strategically accountable for policy management, talent acquisition, employee development, leadership and succession planning, while redistributing time and resources according your business priorities. Acquiring, managing and developing talent is by far the most strategic focus for HR because it creates alignment between company and employee objectives. Attracting, recruiting, and retaining key talent is needed to achieve high growth while scaling up – be that locally or globally.
8) How can the company be proactive in recruiting?
Every business wants to carefully hire the best of the best as they grow. Be proactive by creating a smart plan to increase head count along with a total compensation and reward package. This allows you to think in the long-term, so you can thoughtfully consider filling roles within your company. Instead of acting in the short-term to fill open roles, consider keeping a rotating file, and holding periodic interviews, to ensure you have a talent roster to choose from on an ongoing basis.