Based on the Federation of Small Businesses data, 60% of all private sector employment in the UK in 2014 is within small businesses. As these SMEs apparently account for over 99% of all private sector businesses, it is increasingly obvious why small businesses are being seen as the catalyst for private sector economic recovery.
The question therefore put to small business owners is: How crucial is HR support to your business growth strategy?
Effective leadership encompasses the management of three key components of a business; people, performance and processes. Quite simply, if you have employees, you need human resources and systems to control, focus and develop their work.
Businesses are initially formed from a vision, a vision that helps the business build momentum, grow and develop. However with that growth comes additional responsibilities for the leader, including strategic and administrative functions. One of those more time consuming activities is that of dealing with staffing matters.
With that in mind we explain 5 reasons why HR support is so pivotal to successful business growth;
1. Role development and staff training needs
A growing workforce requires the appropriate people in the appropriate roles, and staff training and professional development opportunities that meet the business growth needs. HR will conduct skills gap analysis and needs assessments for the company’s current workforce, offering workforce structure advice, identifying training requirements and providing recruitment help.
2. Cost and time efficient recruitment and induction
The costs of recruiting new or replacement employees in terms of time, finance and resources can be significant, particularly to small businesses with no established protocols, procedures or dedicated roles in place to support. An outsourced HR function will implement a well-structured, comprehensive recruitment and selection process, ensure time and cost efficiencies but more importantly, effectiveness, within each part of the process; job adverts, interviews, training and induction. It also provides legally compliant employment contracts, probationary period clauses and associated policies, providing peace of mind to employers if anything goes wrong.
3. Performance Management
Developing and overseeing performance management systems has always been a main HR function. These should effectively cement the link between the business’ vision, strategic objectives and day-to-day operations and activities, providing standards and measures for employees to assess their work and behaviour against. Effective performance management techniques are also an essential way of dealing with staff who are not meeting the required standards. A HR function will implement and apply fair and legally compliant disciplinary procedures to manage any significant performance issues as efficiently as possible, accompanied by relevant written documentation to ensure protection against any legal redress in the future.
4. Conflict Resolution
Conflict in the workplace is unfortunate yet inevitable, and can cause huge damage if not dealt with quickly and effectively. Factors such as naturally diverse personalities, working styles, experience and backgrounds all play a part in causing differences of opinions. HR support will help manage disagreements and relationships, providing assertive action and mediation where required.
5. Strategic Leadership
Professional HR support plays an essential role in supporting business managers to understand how to manage and develop their expanding team, while retaining and honing the core values that aided the business’s growth in the first place. The company strategy and vision needs communicating, instilling into the organisational culture; people need to buy into it and grow with the business. HR provides the necessary guidance and support to help make this happen.
So to summarise, as a People Performance HR consultant I am a little perplexed. In the words of Jill Miller, Research Advisor at the CIPD; “SMEs typically have limited materials and financial resources – their people are their business”. I often ponder the wide variance of this understanding and appreciation between different business owners. Why is the investment in effective people management as ‘fundamental to achieving sustainable organisation performance” not always there?
Where are we, as HR professionals going wrong?
To all small business owners…please do indulge me.