Dynamic Business

The most valuable aspect of any business is its staff, and with statistics indicating that Australia’s SME sector employs up to 40 percent of the nation’s workforce, it is essential to understand the importance and significance HR can have in generating and maintaining business success.

Bill Gates was once quoted as saying: “Take away my 20 best people and virtually overnight, Microsoft becomes a mediocre company.”

Employing the wrong staff or turning over staff in a small business can be catastrophic as they often take important intellectual property and countless hours of training that cannot be easily replaced.

Attracting and employing the right staff if essential, but just as important is retaining and managing them. HR plays a very important role in recruitment, retention and everyday staff management. Too often HR is put to the bottom of the pile in SMEs because owners and managers don’t have the required HR skills or experience, they find it easier to put up with a poor performing employee than having no performer at all; and such processes and policies are considered time consuming and costly. And yet, if you think about it, HR is fundamentally more important for SMEs as one employee can disrupt the entire business!

Access to simple and effective HR support is fundamentally important for all businesses, regardless of size. HR is required to set the guidelines of how to find, retain, manage and motive every businesses biggest asset: its people. For SMEs, HR can and should influence and motivate its people to a much greater degree as it promotes the more accessible face-to-face interaction often lacking in larger businesses. Proactive and effective HR should bring out the best working skills of each employee while being aligned with business goals.

Recruitment

Attracting the right people is an integral part of building a SME, from writing the ad, to reference checking and ultimately selecting the best person for the role, a thorough recruitment process is essential. No longer do job applicants line up at your door looking for work, to find the right person you need to actively attract them and often the potential employee will interview you in their search for the right job.

To the unskilled SME owner, this process is daunting and one that cannot only be time consuming and expensive, but hold high risk and have long lasting effects for the business. No one wants to invest time and money into someone who is the wrong fit for the business and this is where someone with a strong HR background can be invaluable.

Retention

The first step for all SMEs is to understand is that effective HR must reach beyond merely attracting quality staff. Although ensuring a thorough recruitment process is being used is a fundamental guideline, HR should not simply be limited to this first phase of employment. It is hard work to retain staff; a conscious effort must be made to keep the good, manage the poor and get rid of the bad.

Retention begins from the day the employee starts to the day they leave, the length of the period in between is directly proportional to the amount of time a business puts into its retention strategy. Induction, policies, probation, regular appraisals, feedback, rewards, challenges, training, development, exit interviews and understanding what motivates the staff member are all important when it comes to staff retention. In SME’s these are all things that often get pushed aside and are seen as non-profitable activities when there is no HR.

Discovering what motivates your staff is important when it comes to retaining them. Don’t be afraid to try a variety of options as what motivates one person may not motivate the next so avoid a blanket approach. The beauty of being a smaller business is you have the flexibility to manage employees individually. Find out what motivates each individual employee, balance the staff’s importance with what your business can afford and you will be surprised how easy it is to compete with the larger organisations. There are cost-effective alternatives that will keep your staff, motivated and in your business.

Everyday staff management

HR support is critical to provide advice, guidance and support for employees and SME owners alike. Where there are employees there are questions around entitlements, legislation, harassment and company policy that come up regularly. Having up-to-date policies, procedures and employee handbooks means employees have clear guidelines to work from.

Although it may seem common practice for businesses to have simple policies and procedures in place, the overarching concern here for owners and managers is that they don’t have the time (and usually experience and skills) to dedicate to HR when they should be focusing on the business and doing what they do best. It may take time upfront, but will save time in the long run.

Staff issues arise at various phases throughout an employee’s lifecycle; someone resigns over the peak period, people taking leave at the same time, employee disagreements, or realising someone doesn’t have the necessary skills are all situations where it is necessary to be proactive in implementing and managing HR.