You spend a lot of time building up your organization and perfecting your product. But what about your people? As a small business owner, staffing is vitally important, especially for organizations in growth mode. These are the people that keep you from working long(er) hours, help you scale and provide you with valuable feedback.
Often, human resources (HR) is over looked, especially as you’re trying to wear multiple hats. But we’re here to tell you it’s an essential component of any organization and critically important to get right.
Here are a few reasons why:
It’s the law. There’s a lot of legal stuff surrounding HR, and not just in the context of the fun stuff like disciplinary action and termination.
“While most managers are aware of the legal snares that come with termination decisions, the hiring process is equally fraught with legal peril. Most commonly, applicants who were not hired may allege discriminatory failure to hire on the basis of race, gender, age, disability, or some other legally protected category. It is also possible that applicants may pursue claims based on inappropriate inquiries made during the application or interview process” (source).
For instance, did you know you can’t ask about age, citizenship status or what they enjoy doing in the spare time? And we’re just getting started.
Cheers to happy, healthy employees. You have champions for your finances, your marketing, your operations. In a small business, these might even all be you. An HR professional or team is the champion of your people.
Part of their job is to gauge and maintain employee satisfaction. They can send out satisfaction surveys, meet with key team members and facilitate exit interviews, all of which will give you vital information and insight into the people on your team.
Why is this so key? In small organizations, people are often performing multiple duties, as well as carrying around a lot of knowledge about the way things are done. Think about what would happen if you lost just one key individual during the early stages of your business? How would that affect your bottom line?
Let’s not forget about the cost of training a new employee versus maintaining a good employee. It can cost anywhere between 30 to 50% of an employee’s salary to onboard a new employee. Yep, we said 30 to 50%.
Improve and resolve. When you’re just starting a company, you’re looking for anyone to help make your dream a reality. But what happens if, as your company expands and grows, you realize one particular employee isn’t in the right place within your organization? Do you have a plan to improve employee performance?
“Without a human resources staff person to construct a plan that measures performance, employees can wind up in jobs that aren’t sustainable for their skills and expertise” (source).
Let’s also take into account that we’re all human beings and so, sometimes, we don’t get along with everyone else. Do you know who within your organization will handle workplace conflict? As ideal as it would be to say, “We’re all adults, figure it out,” it’s best to have a skilled professional handle employee relations and conflicts.
Onboarding, off-boarding and all other things boarding. When an employee begins working with your company, they need some sort of training (unless they’re a genius). HR helps to perform onboarding functions like training, review of benefits and can even be part of the interview process.
They can also work with current employees to make sure they’re able to improve on their skills and qualifications by providing training and development opportunities. By identifying areas for improvement, they can work to improve the skills of your current work force, saving you time and money in hiring and training new employees.
And if an employee decides to leave, they can work to ensure they know the reasons why (through a little thing known as an exit interview) as well as that they’re not walking away with valuable knowledge which hasn’t been transferred.
The bottom line is that HR doesn’t only affect people within your organization. It affects your bottom line. It’s important to have systems in place, all the way from recruitment to exit, to ensure you’re not only compliant, but also employing good, quality people.
Seem like a whole ton of work? We can help. The Possibilities Center is pleased to announce our newest endeavor, HR Consulting. Contact Lisa Fitzgerald (email@example.com) to learn more.