It can be easy to overlook HR in a small or medium enterprise. Many entrepreneurs get their businesses off to a flying start but grapple with people management as the business starts to flourish.
Managing staff takes time and it requires specific skills. HR is an area of expertise many business owners lack.
Regardless of skills, the value of HR in business isn’t always immediately apparent. With just a few employees, business owners feel like they have their finger on the pulse when it comes to the people they hire and manage.
But as a business grows, the owners often find there just isn’t time to deal with day-to-day people management and recruitment, and the focus on people can easily get lost. This is a costly mistake and can affect employee satisfaction, culture, and long-term success.
Consider the consequences of poor HR. When employees don’t feel supported, aren’t being given opportunities, work long hours, and so on, their motivation to perform is impacted.
Underdeliver on effective HR and you’ll see a knock-on effect on your bottom line. People, culture, and business success go hand-in-hand.
The importance of HR during the pandemic
The coronavirus pandemic has forced us to re-evaluate the way we do business. As part of this, the HR function is taking center stage. Companies are being increasingly measured by the decisions they have taken and the way they treated their staff.
What’s more, the impact of ongoing economic uncertainty, remote working, and an all-too-real impact on employees’ mental health are forcing businesses across the United States to place human resources at the heart of their operation.
From supporting managers with remote management skills through to sensitively communicating the consequences of a downturn in business, HR is crucial to the effective management of a business during a pandemic or other significant event.
What are the main functions of HR?
Recruitment and onboarding
Finding the right people to work in your business can be difficult. The recruitment process can take months and getting it wrong can be costly. Finding a good fit when it comes to recruiting talent is one of the most important aspects of HR. Hire too many people, too few or recruit an inappropriate candidate and your business will suffer.
The importance of onboarding is perhaps the most underestimated part of the recruitment process.
Not to be confused with orientation, onboarding refers to the whole experience of hiring, welcoming, orienting and engaging a new heir and helping them adapt to your organization’s culture.
Good onboarding maximizes employee engagement and increases retention. In contrast, poor onboarding can have a hugely negative impact and leave talented new employees disengaged from the word go.
Performance management and training
Performance management, training and development are a big part of HR. Almost all employees have skills gaps. Performance management helps address those issues.
An effective performance management system enables managers to offer support to employees who need it and identify future superstars.
It’s widely recognized that employee development contributes towards better employee engagement, increased productivity, reduced employee turnover and a more positive culture.
Comprehensive training and personal development help strengthen any weak links in the company (including managers). Investing in your employees strengthens your organization and gives your business a competitive edge.
Building and maintaining company culture
Positive business culture is no longer a nice-to-have. It drives employee engagement, job satisfaction and staff retention, and it defines business success. HR plays a key role in developing, reinforcing, and changing the culture of an organization.
Pay, performance management, training and development, recruitment, and onboarding, and reinforcing the values of the business are all essential elements of business culture covered by HR.
Businesses require effective communication to operate well. And so often, the way communication occurs in a business is defined by HR.
Good communication mitigates misunderstandings, increases employee engagement, forms the basis for better client relationships, encourages innovation and creativity and helps build a positive culture.
Legal and regulatory compliance
HR professionals have a full understanding of employment law and the regulatory requirements of a business associated with staff. This enormous area shouldn’t be underestimated; an unfair dismissal claim can be an expensive mistake.
Employing a dedicated HR professional isn’t a luxury for SMEs, it’s essential. Our people are your greatest resource. Treating your employees fairly and providing them with opportunities to grow will help you achieve your ideas and hit your business goals. This is something that SW HR Consulting is well-placed to help with. Contact us to find out more about our unique services and see how our expertise can benefit you.