As a small business owner or leader, you may intuitively understand the benefits of a solid HR program. You might be sensing that to move beyond surviving to thriving you need a system to pull everything together.
But you may be unclear of what that looks like and are too busy running the business to spend time figuring it out.
It’s likely you understand there are legal compliance issues that come into play as soon as you hire one person, but the business reason for creating an HR structure is the most effective motivation to put it in place.
A strong HR foundation creates a more engaged, productive team, which makes and saves you money.
This article will cover about how it does that, as well as outline the elements of a powerful HR base.
The Case for Solid HR
A good HR program ensures you attract and retain the right people, that they are in the right roles, doing the right work, at the right time to produce the end results necessary for the business to succeed.
Everything in HR can be linked back to this overarching goal. For example,
- if an employee is hired but doesn’t have the soft skills to effectively do the work, they aren’t in the right role
- if an employee is being harassed by a coworker, the distraction will take them away from their work
- if you aren’t paying people competitively, you won’t be able to keep them. HR solves all these problems, which left unchecked will cost your business money or prevent you from making it
Without a comprehensive HR program in place, you’ll be reacting to your people issues rather than proactively managing them to meet the goals of your business.
As a business owner, I know that running a small business requires lots of juggling to fit everything into a finite number of hours in a day. Putting an HR program in place doesn’t have to be complex or overly time-consuming. In fact, a good HR program should save you time.
All companies need HR. Larger companies’ HR programs may be elaborate, but don’t let that stop you. Most small business can’t afford to purchase an online performance evaluation system but all of them can implement a simple paper based format that will serve the same purpose.
Below are the basics of a solid HR program. If you get these in place while your business is small, it will simply be a matter of tweaking as you grow and your needs change.
1. The Legal Stuff
Compliance with employment laws is the cost of doing business. It’ll save you a headache down the road if you happened to be audited. Here are a few of the basics you must ensure are in place.
- Legally mandated postings displayed properly
- Employment applications and offer letters that protect the organization, not put it at risk
- Employment files that contain items you’re required to retain or that you would need in your defense
- Processes and procedures in place to comply with safety regulations
2. Hiring Right
One of the keys to a thriving business is to hire people who are well suited to both the job and the company culture. Small businesses struggle with this because when short staffed by just one or two people, it places a huge burden on the business.
If you only have 15 employees and you lose 2, that’s 13% of your workforce. The pull to quickly put someone in the open position is strong.
But taking the time to find the right person will save you headaches down the road. Hiring well is more of an art, not an exact science. Creating a good hiring process is an essential part of any HR program.
3. Communicating Clearly
Recruiting and retaining great people requires attention to detail in communication. Given the rushed pace of life, most of us tend to under communicate.
Having a few key HR documents and processes in place will ensure employees are fully in the loop and understand your expectations as well as the boundaries they shouldn’t cross. Below is a list of a few of the basics.
- Organizational structure chart
- Job descriptions
- Employee handbook
- Performance feedback documents
4. Staying Organized
It’s hard to imagine life without Outlook or similar software to keep us organized. But 20 years ago, we relied on Franklin Planners, file cabinets, and other paper methods to stay organized.
HR requires tools that will make maintaining an HR structure easier. And just as with calendaring systems, there are high and low-tech options.
Small businesses are watching every dime, so use the tools you have already to keep your HR function organized. For example, spreadsheets can be used for tracking employee information, creating checklists, and tracking employee performance.
HR standard operating procedures are also very useful for small businesses to document processes that happen less frequently than they do in large organizations, making it easy to be consistent over time.
5. Rewarding Well
The ability to create and communicate a salary and benefits package that will attract and retain top people is foundational to the success of a business. Even if you can’t offer the highest pay in town, you must be able to articulate what you can offer to your team.
Having a simple structure that outlines your plan for how you’ll pay makes negotiating offers a breeze and ensures that you are compensating existing employees equitably.
Having HR systems in place will make operating your business easier. Now that you understand the importance of and have an outline of the HR essentials, what parts of a solid HR foundation will you put in place this year?
You can leave your answer in a comment below. By sharing your intention publicly, it creates higher accountability and increases the likelihood you’ll get it done!
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People Matters provides support to business owners and leaders in all areas of human resources.
HR is what we at People Matters love to do! We help our clients create great workplaces that engage employees and produce better business results.
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