How Small Businesses Can Improve Their HR
by Makuo Jinanwa
Are you worried that your business could be defaulting on employment regulations?
Concerned that your staff members aren't comfortable in their HR roles?
You're not alone…
Over 50% of small business owners aren't confident either. Which is quite unfortunate given that HR oils the engine of any business — it's employees. Little wonder nearly 80% of the workforce are open to switching jobs for better working and remote conditions and that's why it's time to revise how your HR department handles talent acquisition, retention and employee experience.
In our consultations with small business owners, we've helped them through the very same problems you're struggling with now, leading them to a turning point where:
- ● They're informed on important issues concerning employee welfare.
- ● They execute HR processes effectively and efficiently.
- ● There's tools in place to help them manage processes and data
In this guide, we'll look at how to take informed action, grade HR performance, upgrade it's capacity, assign roles and network to get you the same results listed above...ready? Lets go.
How To Take Informed Action When It Comes To?
There's more to HR than hiring. There are other roles such as performance management, talent acquisition, employee relations, talent management (training and development), and the Chief Resource Officer role. Then there are processes adhered to like HR laws, HR planning processes, and employee files and documentation.
To take informed action, you have to first be informed.
If you struggle to find time as a small business owner, it's time to find it. Train your staff to delegate some of the work you do on a day to day basis so you can figure out your HR procedures. The alternative would be eating into your profits to hire an HR professional. Who knows, it may be the cheapest way to solve your HR problems in the long run
Regardless of your choice, you need to start acting informed when it comes to HR processes to avoid employee problems that eventually affect other parts of the business.
Get your payroll right the first time around, every time. Classify your employees correctly and pay appropriately to maintain trust and a positive mindset — that's the goal of your HR department.
Grade The Performance Of your HR Department
You can't improve what you don't measure — Peter Drucker
In the case of HR, small business owners don't have a clear link between good HR practices and company growth. For the most part, HR is seen as a preventive measure and not a proactive tool in achieving business growth.
Here's a way to explain this...
A small business owner may view HR as a department to help protect the company from employee fallouts that can be disastrous for business performance and reputation. And although this is one benefit of your HR department, it's a defensive approach to HR management.
Theres better...
Let's look at a more proactive benefit of HR in one of its functions which is HR planning. Unlike talent acquisition where HR hires talent to take up present job positions, HR planning is about recruiting talent that align with the company's future goals HR can spearhead your business strategy in such a way that takes on the competition.
Which begs the question…
What does your short, intermediate and long term goals/plan look like? How does HR contribute to the execution of these plans? This is how you take advantage of HR as a proactive department capable of bringing you business results.
Now to measure HR's performance and quantify business results.
Do you have a collection of known KPIs to measure the performance of your HR department?
Let's take the turnover rate of your business as an example. On the average, a company would have an 18% turnover in its workforce every year. So when you notice your company has say a 28% turnover rate, you know that your talent acquisition process, an HR function, needs to be reviewed. This is just one KPI, there are many others like HR Planning and Performance Management. We'll discuss them in detail some other time.
Upgrade The Capacity Of Your HR Department
Digging for details is great when measuring the performance of your HR department but when it comes to upgrading it's capacity, think immeasurable, think culture.
Work culture has become a trend in the business world, yet less than 30% of top business executives understand their work culture. And even more shocking is the fact that just 12% of executives believe their companies are driving the right culture according to Deloitte.
If you want to start building your work culture, then Ed Nathanson's guide is a good start. But for the sake of this article, work culture is best understood as the expectations a business owner sets for themselves and their early employees which gets passed down to the rest of the workforce as the company expands. As CEO, you're the first HR personnel.
Culture aside, another way you can improve the capacity of your HR department is to use technology. Good HR software can give you the productivity of one or two HR personnel for less than half their cost.
This is what Doo People helps you with. You can sign up for free and create a central portal to help manage your employees' welfare, data, performance, time off, claim requests and more...
Upgrade The Capacity Of Your HR Department
What you ideally wait for your employees is for them to feel that they're at the right place at the right time, whether they're HR personnel or not. You want team members excited about the work they do and motivated managers who care about the development of their teams. And leadership that works with HR to maintain this positive work culture. But to put square pegs in square holes, you have to intimately understand the pegs and the holes.
What do the roles at your business entail?
How well are your staff at these positions performing?
How do they feel about their current roles?
This is the job of your HR department but since you want to improve their performance, roll up your sleeves. Have one-on-one meetings with your staff. Effective communication is a challenging task so it'll take genuine interest in your employees, active listening and experiments to help them figure out where they can best serve in the company.
Truthfully seeking a people-culture fit for your employees builds a work culture of less politics and more effective communication. You can't imagine how far the positive effects of this change will have on your organization. For one, your HR department would become more effective because you and your staff are already taking on part of HR's responsibilities.
Another would be an increase in operational speed of your business as there is higher trust within team members and between departments.
Improve Your HR Department Through Networking
We've looked at 4 steps to improving your HR department as a small business owner, and now we look at networking. Running a small business can be a tough and lonely journey but the burden can be a lot lighter if you reach out to other small business owners.
Collaboration doesn't only have to be about expanding your customer base, you can improve your leadership qualities as well. Some of the best business advice comes from dinners, events and even comment sections of online communities.
Don't be a lone wolf.
Reach out to other small business owners and help them the best you can by sharing business advice that has worked for you. You'd be surprised by the value you get from being a part of such communities including tips on improving your HR department. For starters, attend events at your local chamber of commerce. Search online entrepreneurial communities on LinkedIn and search forums.
Wrapping Up
If you are worried your HR department isn't as good as it should be, it can be fixed! It all starts with your mindset and approach to HR. It's more than a defense against employee problems. It's an opportunity to improve employee welfare and great performance follows.
It's the business owner's task to build the foundations of their HR department. And it starts from your relationship with the first few employees at your company — one-on-one. Yes, it's a lot of work but you're building a work culture that'll decide the longevity of what you're building.
HR will always be an ongoing project. There's no end destination and failures are simply avenues to improve.
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