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.

The Sustainability Factor for HR/OD

When Steve Jobs announced he was stepping down from his position as CEO of Apple on August 24, 2011 the articles, comments, blogs and tweets began immediately and will likely continue for some time. In The Harvard Business Review (August 25, 2011,Joshua Gans wrote about whether or not buying Apple stock was a good idea. I did want to link to the article but it appears that the link is no longer available. However, I believe the quote below includes enough context.

While the article focused on the stock, Gans makes a key point that all human resources and organizational development professionals should take note of and ask if they are making a contribution to sustainability in their organizations.

“First, there is every reason to expect that Jobs second tenure at least in part has focused on baking innovation into the organization. A couple of months ago, Adam Lashinsky in a Fortune magazine article (sadly, only available behind a paywall, but it will be the best 99 cent purchase ever on your Kindle) described the cultural transformation inside Apple. The last 15 years have been all about establishing an internal culture for innovation and a set of norms of behavior and expectations. While the culture came from the drive of Steve Jobs, it is a reasonable expectation that he infused it into the organization itself.”

The concept of “baking innovation”, “establishing an internal culture for innovation and a set of norms of behavior and expectations” is generally considered to be a top down responsibility. Yet human resources and organizational development professionals are in a powerful position to ensure that the organization achieves these goals. It is a concept that must be imbedded in each and every program, policy, system and task that you do or drive in your role. The sustainability of companies lies with the ability of the people who work for them to create and innovate, with flexibility and agility and to measure the performance of employees based on their ability to make their contributions with those factors in play.

The ability to create, innovate, have flexible systems and agility is critical to the long-term success of companies in technology, education and health care industries right now. In the near future this will become a factor for those organizations that are operating in low-tech fields.

When you look at the core competencies for your organization, do they include creativity, innovation, flexibility and agility? If so, how well are they integrated into the organization? Does your attraction, retention and development system reliably “bake” those competencies into the culture? Does the culture in your organization embrace these competencies? If so, how do you know?