Human Resource Strategies for Small Businesses image

Human Resource Strategies for Small Businesses

SMALL BUSINESS

9th December 2016

Effective human resource strategies are essential for small businesses. They aren’t a luxury that you can skip, particularly in today’s business climate.

To understand the importance of a good HR strategy, it is necessary to appreciate what the workforce of today is looking for.

Understanding Generation Y

Employees are less loyal than they have ever been before.

Generation comprises workers born between the early 1980s and the early 2000s, and statistics show that this generation has brought with it a unique perspective.

These are workers that care deeply about their work-life balance and being treated fairly at work.

Unlike their parents and grandparents before them, workers from Generation Y are happy to hop from job to job.

Those born in the 60s may have entered their working lives with a plan to remain with their employer long-term. Workers that fall under the Generation Y umbrella are not so committed to stability.

In fact, a Jobvite study found that whilst 74% of workers were happy with their current job, and a further 20% considered their opinion of their job to be neutral, 70% claimed to be open to moving elsewhere.

Additionally, whilst 72% of over 50s stayed in jobs for more than 10 years, the figures were very different for the younger working generation. 42% of people in Generation Y move to a new job every 1-3 years.

And financial renumeration is no longer the top priority. Work flexibility, including the option to work from home, is becoming increasingly important.

Why HR strategies need to keep Generation Y in mind

For a HR strategy to be truly successful, it must take into account the direction of future developments.

Statistics show that HR strategies now need to be more focused on flexibility and work-life balance, using those to encourage loyalty in a climate where it has to be earned.

What small businesses can do about their Human Resource Strategies

Small businesses have the potential to change the working landscape. They are in a unique position of being in their early stages, when compared to national or multi-national corporations.

Many small businesses are using this to their advantage, creating environments where the focus is on the development of a relaxed and friendly workspace. Employees are being given more freedom, with a chance to express their individuality. And it’s paying off.

But, small businesses also have limitations. Financially they will not have the resources to create games rooms, to host huge parties and to set up advanced teleconferencing systems.

As a result, the development of efficient human resource strategies becomes even more important.

What a good HR strategy will do

Human resource strategies should align the needs of workers with the needs of the small business, to maximise employee performance.
It begins with recruitment and continues right through an employee’s working career, including training and development. The goal is to employ the very best, help them to become even better and ensure that they don’t leave to take their skills elsewhere. Easier said than done.
A HR strategy must also prepare for the worst, with succession planning.

Things must continue smoothly if someone hands in their notice.

A departing worker must be replaced quickly and efficiently. Their knowledge and expertise will need to be passed to the ‘new recruit’ with minimal disruption.

Unfortunately, small businesses do not always get the pick of the best employees. The most skilled and talented can command the higher rewards and status associated with a larger company. That’s why it is particularly important to develop an effective HR strategy that makes a small business appealing and successful.

Developing human resource strategies for small businesses

Having the right tools

Most small businesses do not have the capacity for even one member of HR staff, let alone a HR team.

In the earliest stages, HR tasks may be shared between every person in the business. Over time, someone may be recruited to take on a HR role.

For small businesses with such a limited resource, the right tools are particularly important. Reliable and user-friendly HR software, like Staff Squared, can be the difference between sinking and swimming.

The best HR software brings everything together. It helps to keep staff on track, gives them access to essential HR documents and ensures that important information is all kept in one place.

It is impossible to develop good human resource strategies when paperwork is scattered, policies are non-existent and members of staff don’t have regular feedback opportunities.

Checking the legal details

Policies must be legally sound. This should be a top priority as you develop your HR strategy.

You may benefit from outsourcing your policy creation to a professional HR consultant, and working closely with them to make sure that your documents are legally binding. Additional support will help you to feel confident that you are not breaking any employment laws, or creating unnecessary risk.

In the early stages of any small business, outside help may be essential to navigate the more complicated challenges.

Ensuring employee satisfaction

Employee satisfaction is one of the core goals of any HR strategy. There is little point working on recruitment and development of staff, if they are not happy enough to stick around and repay your investment.

When even satisfied employees would depart for a better opportunity, it is very important to do all that you can to make your business an attractive one to work for.
Consult with existing employees. Find out their priorities and what motivates them. You can use this to shape the rewards that you provide for your workers. The perks of the job will attract new talent, as well as keeping existing employees on your side.

Anything that you provide as an employee benefit should fit with your company’s culture. Think about the types of people that you want to appeal to, also.

Potential job perks (aside from the money) might include time off, family events, free snacks and drinks, healthcare, subsidised gym or club memberships, employee discounts and flexible working hours.

Regular performance evaluations, though they don’t sound like much fun, provide unique opportunities to address issues that employees are facing. Few look forward to them, but they are a key way to show your employees that you care about them and are committed to giving your best and getting theirs.

Don’t restrict employees to an annual review. Meet with them more regularly, or have a system in place so that they can submit any concerns to you digitally. A year is a long time for an issue to continue, without being noticed and resolved. 

Changes and evolutions

Human resource strategies should evolve with businesses. You should always be thinking about ways to streamline processes and get the most out of your staff.

Take on board what employees at all levels are saying. Everyone has a valid opinion, worth taking into consideration.

Also schedule regular HR development meetings, for a focused review and evaluation of how your HR strategy is working.

Always remember that your human resource encompasses every single person in the business. No matter how big or small your company, the primary goal remains the same – to keep the people and the business connected.

Written by Sherree Tibbs

Customer Care Team Manager - Staff Squared

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