Imagine you’ve just started a new business venture. You’ve registered the name, bought the domain and sorted out a logo.
You and your business partner are excited and ready to go.
Fast forward two years and you need to hire again. Your team is stretched and tensions in the business are high.
Not only that, but your business partner has been distracted lately and talks of leaving.
How will you manage the transition? How will you find the right people with the skills you require?
You see, the true value of human resources (HR) is getting the best out of your people, no matter the situation.
It’s not just the admin, compliance or running payroll. It’s about leadership and managing change.
So, let’s take a look at what HR really is:
What is HR really?
HR in its simplest form is the management and development of employees in an organisation.
This broad definition falls under five key areas:
Recruiting and staffing
Compensation and benefits
Training and professional development
Labour and employee relations
Organisational development
There is a lot to take care of, especially for a small business, and seemingly no resources or time to do them. Unsurprisingly, many businesses get unsatisfactory results.
Where HR often falls short
In our above example, the business owner needs to manage the transition in leadership. Likewise, they need to expand their team to fill talent gaps.
However, the business owner doesn’t have the time nor the motivation to do the ‘HR stuff’. Ideally, he wants to pay someone to do it for him.
This brings us to a common problem in small and medium-sized businesses. HR is viewed as a ‘necessary evil’ and a role carried out by a specific set of individuals.
While businesses can benefit from specialist HR professionals as they grow, smaller businesses need a shift in mindset.
They need to recognise that there’s no actual separation between HR and the business. They either work together or the business doesn’t work at all.
The truth being: Every manager is an HR manager.
Their role is to get the best out of their people. In this way they’re responsible for the performance, development and wellbeing of those under them.
However, rather shockingly, only 10% of managers have the necessary tools and skills to be effective people leaders.
And it’s not their fault. They became managers because they were good at their previous role, or because they were technical experts in their field.
This is regardless of whether these positions had anything to do with people management or not.
So how do we turn this shocking stat around?
Making HR work for the business
The role of HR should be to support both the business and those working within it. In short, it should be a ‘key enabler’ of business performance. However, this is often not the case in busy environments where the basics are taken for granted.
David Ulrich, the undisputed king of 21st-century HR practice, argues that there are five fundamentals to getting value out of HR:
Understanding the external business environment
Serving your customers, investors, managers and employees
Crafting HR practices
Increasing HR resources
Ensuring HR professionalism
If we apply this framework to our earlier example, the business owner needs to communicate how the change in leadership will impact existing roles. They also need to fill skill shortages in the organisation.
By understanding the job market the business owner acknowledges that it may take a while to find and hire new staff members. And any resulting lag will put extra pressure on existing staff to continue delivering for customers.
Therefore, it is important that they account for the time, cost, and resources it takes to hire new staff. They should also consider ways to alleviate increased staff workload in the short term.
This could include:
Exploring new ways to get work done
Prioritising and ensuring deadlines are achievable
Improving role clarity and communication
Breaking down difficult tasks into micro-tasks and ensuring the right people are doing them
Making staff take regular breaks
As the team continues to expand, so do the HR functions and administrative requirements. This may be time to consider a dedicated HR resource internally or outsourcing to an external party.
There may not be the capacity to employ a full-time HR manager. Instead, they could consider an HR consultant used on an as-and-when-required-basis that doesn’t lock them into long-term contracts.
Finally, the business leader needs to ensure that they have the right structure and tools in place so that staff can focus on their core strengths.
The HR team should be no different. For instance, recruiting staff requires contrasting skills to managing remuneration and employee benefit schemes.
It’s about the right team, the right management structure and ensuring people are situated in the roles most suited to their skills.
What next?
The true value of HR is getting the best out of people, no matter the situation. However, this requires an ongoing effort by everyone in the business, not just people with ‘HR’ in their job title.
It starts with the right mindset. The recognition that every manager has a responsibility for the performance, development and wellbeing of others in the organisation.
Doing this well is never the result of inaction or contingency, but a conscious effort to serve staff as well as customers.
By making everyone in the organisation feel valued and taking personal responsibility for their success, staff will feel this dedication and provide the same value for customers in the long-run.
The true value of HR is getting the best out of people, no matter the situation. However, this requires an ongoing effort by everyone in the business, not just people with ‘HR’ in their job title.
It starts with the right mindset. The recognition that every manager has a responsibility for the performance, development and wellbeing of others in the organisation.
Doing this well is never the result of inaction or contingency, but a conscious effort to serve staff as well as customers.
By making everyone in the organisation feel valued and taking personal responsibility for their success, staff will feel this dedication and provide the same value for customers in the long-run.