HR 101 FOR SMALL BUSINESS

HR 101 for Smaller Businesses

Simple, understandable, sustainable and cost effective HR answers...

For smaller businesses, the HR problem is twofold. Firstly, with limited or no in-house HR support, the CEO (or CFO in many cases) spends far too much time dealing with people issues. This is time that should be spent running the business. Secondly, and perhaps more important, the company's HR decisions tend to be disjointed, uninformed and without strategic focus. Given that success must be achieved through people, this approach to HR means that the organization is very vulnerable.

Less than favourable HR practices produce what are called "profit grabbers". These costs eat away at the bottom line and have a significant impact on profitability.

The 4 greatest profit grabbers are:

• Turnover - Employee turnover sabotages your bottom line to the tune of 150% of annual salary (or more) for each one leaving.
• Compensation - Paying too little (or too much). Both are equally dangerous. Subjective bonus plans have little value. Poorly designed benefits plans waste money with little ROI. Lack of attention to employee development and work environment breeds turnover.
• Employee selection - Not deliberately hiring the right people to sustain growth and meet future needs will soon result in capability gaps that will cost you money to correct or will result in missed opportunities.
• Performance management - Failure to align employees at all levels with business objectives and organizational goals results in lost productivity.

Additional profit grabbers lie in the myriad of laws, regulations, standards and employee policy issues to deal with. Who has time for all that? Diverting substantial management resources to handle these are additional "profit grabbers".

Be HR innovative, progressive and cost effective rather than HR vulnerable.