Why Does Your Small Business Need HR?

One of the reasons I advocate for small businesses to start to build their HR infrastructure early in the start up phase is because it will help save time and money over the long term. Putting aside for now the practical aspects of being within compliance of employment laws we need to consider the culture we envision for our business and to understand the internal and external factors that will affect that culture as the business grows.

In my first discussion with a business owner to determine what the HR needs of their business is I ask that they answer a short series of questions that provide a good picture of their business today and their plans for the future. Answering these questions is helpful to me in understanding the goals for the business but it also provides the owner with another opportunity to review the overall system and strategies from a fresh perspective.

Understandably the focus of most small business owners is attracting and engaging a paying client base but attracting and engaging employees is equally as important as your business grows. Having an agile, well thought out and straightforward HR infrastructure is essential to ensuring that your customers have the kind of experience that will bring them back and prompt them to refer your business to their contacts.

Having the money available to properly manage your HR considerations is a very real concern when a business is in a growth phase, perhaps more so in businesses that have significant cash outlays for premises, inventory and equipment. This is just one reason why an agile, module based infrastructure is ideal and it will allow you to implement only the aspects you need and add additional elements as the business grows and more employment related demands are required.

If you determine what values that you want the culture in your business to reflect and build your HR infrastructure around those values you will have a better shot at developing and maintaining the core cultural aspects that are the most important to you as a business owner. Trying to fix a culture that has gone off track is an expensive and time consuming prospect and can easily derail your focus on other aspects of the business.

Many companies include values such as integrity, honesty, and hard working in their core values, all good values. However, as the leadership figure in your business you need to define precisely what those values look like ‘on the job’ to your employees and customers. This is an oft overlooked but vitally important approach to take when building your business. It helps in the hiring process, as you are clear on the necessary skills and approaches to work you are looking for in the candidates you recruit. Retaining employees requires in part, maintaining the values based culture that you presented to candidates during the hiring process. And ensuring that employees present the customer experience you have determined for your business means a common understanding of what those values look like on the ground.

Values Based Business

Does it help build sustainable business or is it another bit of fluff? I believe it contributes to building sustainability.

One story often heard when people are discussing their challenges at work is that the managers they report to or work with are not consistent in the way they make decisions and in the way they require employees to approach their work.

These three situations are drawn from experience in three different organizations. (These scenarios are also included in a previous post about Learning from Leadership http://bit.ly/rgaexb).

(1) A senior level manager makes a decision that affects the way many people conduct their day to day tasks but refuses to discuss the change before implementing it; aside from alienating those involved there was a financial cost to making needed adjustments that would have been accounted for had he taken the time to consult with those affected first. This behaviour was typical of this manager and created similar issues over a number of years.

(2) A mid-level manager repeatedly makes “jokes” about various people in the organization and when advised that these “jokes” were inappropriate and disrespectful, responded that it wasn’t his fault people didn’t have a sense of humour.

(3) Two members of a management team accuse an employee of theft in a management meeting; when questioned by the other team members as to precisely what happened and what proof was evident the accusation fell apart; it became clear after a very long discussion that the two managers had contrived it out of thin air. They had started out demanding that the employee be fired but ended up admitting that there was no evidence any theft had occurred.

In each of the organizations two of the core values included “respect for people” and “integrity” yet members of the management team in each organization exhibited behaviour contrary to those values. There were trust issues between management and employees resulting in productivity, employee retention and quality issues.

Organizations that talk about the core values to candidates and again to new employees in the orientation process, include them on their website and in their annual reports but have managers behaving outside those core values will have a problem with trust and respect in their organization.

Values based business helps to develop and maintain an agile culture that is resilient. Change comes from many sources but no matter what or where change comes from having established core values aids effective decision-making. When all the managers in the organization make decisions based on established core values it helps to reinforce employees trust.

Do you make management and business decisions based on established core values for your organization? Have you ever made a decision that did not meet the core values and regret it? What happened? Have you worked for an organization where you experienced this type of discrepancy? What was it like to work there?