The SME owner's guide to getting HR strategy right

Many small business owners don’t have a lot of time to devote to implementing a bespoke HR strategy. But that doesn’t mean they can’t get it right.

Running and growing any business takes serious time and effort. And very often so much of that time and effort is spent keeping customers or clients happy that you have very little chance to get around to anything else, especially your HR.

But if you leave your human resource strategy to chance, you shortchange yourself and your business. You’ll end up hiring the wrong people for wrong roles, acting reactively to staff issues and leaving yourself exposed to claims of bullying or wrongful dismissal. When that happens you ultimately end up damaging everything you’ve worked so hard to build.

So if you’re a busy business owner without the time to develop an effective HR strategy, here’s a seven-point plan for getting it right.

1. Do your own HR audit

HR is a wide-reaching term that covers so many functions. These can range from recruiting to people strategy and from payroll to performance management. So before you do anything, examine your business and work out what HR tasks and functions actually need doing. It’s here that you can really start to customise your HR strategy. These should include your hiring and firing, your policies and procedures and payroll. Now, write these down and look at who currently performs them — if anyone does — so that you at least know your starting point.

2. Appoint someone to act as HR custodian

Next, put someone in charge of your HR strategy overall. This doesn’t mean they should perform all these functions. In fact, they probably shouldn’t (see 3. below). It also doesn’t necessarily mean you need a full-time HR person (see 5. below). But it does, at least, mean the HR buck will stop somewhere.

Usually, most SMEs have one person who’s actually interested in human resources and who can take the lead here. But don’t just default to the person who gets along with everyone best. While being a good human resources practitioner requires solid people and communication skills there’s more to it than that. Sure, a good HR person needs to be able to listen. However, they also need to be able to break bad news and make tough calls, which could even include sacking people from time to time.

3. Divide up the roles

HR tasks range from the administrative to the strategic, and it’s unlikely you’ll find one person with the skills or the capacity to do everything. So now that you know what needs to be done, work out who’s going to what.

Chances are you could move some of the administrative tasks to people already performing admin, while your HR and recruitment strategy could be assigned to your HR custodian.

4. Train your people properly

People will only be effective in any role if they know what they’re doing. If you expect someone to develop a HR strategy, make sure you’ve trained them in how to do it.

Like any discipline, there’s a lot of theory behind human resources. So, if you have an HR custodian, they should understand a bit of the academic side, as well as the practical side. This could range from sending them on a specific AHRI course or another practical skill-based program, through to a full HR degree.

5. Outsource

Then again, you may find it easier and more cost-effective to outsource a lot of your HR tasks. Even if you have the skills to perform each of the jobs in-house, is it really the best use of their time? A virtual or outsourced HR provider can often develop a bespoke or custom HR strategy for you. They can perform each HR process more efficiently, more effectively and with more expertise than you could by using your existing staff. They can also step in and provide what you’re lacking whether that’s the strategy, the routine or the support in enforcing your policies or making the hard calls.

6. Invest in technology

There’s an app for that, Apple told us almost a decade ago. And never has that been truer than for the world of human resources. From payroll to performance and from on-boarding to e-learning, you can now find software that will help your HR function more systematically and smoothly. So make use of these and let them help standardise what you do. You’ll find that a lot of cloud-based software can make your life a lot easier for the cost of a small monthly subscription.

7. Hold people accountable

Like any aspect of your business, your HR function will only work if people are held accountable. So be sure that your management team understand what’s required of them and that anyone who has any HR duties also has these included in their KPIs.

Set aside some time each year where you review the direction your HR is taking and whether it still serves your purposes and aligns with your goals. After all, businesses and personnel change, our business direction changes, new rules and regulations get handed down and new HR products hit the market. It’s only by periodically reviewing these and staying up-to-date that you can be sure your HR function is still functioning at full capacity.

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