If I asked you to tell me what HR does in a couple of sentences, what would you say? Not sure? You are not alone.
Over the past 20 years the HR function has transformed its offering. As a result of this evolution, business managers often have mixed experiences of the function, based largely on the work of the individual HR professionals they have met and also the time at which they met them. Just 20 years ago HR was known as the Personnel department in most businesses. This was the department that got your people-related administration done, wrote rock-solid policies (that they loved to refer to often) and was a great place to visit for tea and sympathy.
These days HR teams are made up of commercial professionals with a specialism in people management and development, sit on company boards and add real value to your bottom line. Here we explore how HR can achieve this in the 7 main areas of HR expertise.
HR strategy
Part of the transformation of HR over the past 20 years or so has been the shift from an operational contribution to the business to a strategic one. HR Directors now sit on company boards alongside peers from finance, sales and other functions and can make an equally valuable contribution at this level. How? By understanding and helping to shape the direction of the business (remember a good HR professional should be commercially rounded enough to get involved with this), and then working with you to design a HR strategy that supports the business strategy. What this looks like will depend entirely on the business goals, but the right strategy will ensure that you have enough people with the right skills to achieve your business goals in 5 or 10 years’ time. Some of the elements that this will include are covered in the rest of this article but resourcing, learning and development, reward, talent management and leadership development are likely to all play a part. The exact shape that this will take should be heavily tailored to your business.
Don’t have a business strategy yet? Again, you are not alone! Many SMEs don’t have a strategy that is defined and articulated in the same way as you will find in larger businesses, but you will undoubtedly have goals which amount to broadly the same thing. For example, do you want to retire in 5 years and need to start thinking about your exit? Do you want to grow but retain that family feeling? Think you might have developed a new product in 18 months? These are long term goals that HR can support you with, by working out the impact from a people perspective and ensuring this is planned for.
HR Business Partnering
HR Business Partnering is a relatively new concept that has evolved over the past 20 years. You may be familiar with the job title of HR Business Partner that exists in larger organisations, but in an SME this is likely to be just one of the hats that your sole HR professional will wear! It simply describes the fact that HR now deliver value by aligning themselves closely with senior managers in your business to understand their plans, their challenges and what causes them pain so that they can design the right people systems, processes and interventions to help them with this. The more you include your HR Business Partner in management meetings, discussions and day to day activities, the more you will get out of them as they build up a true understanding of what you want to achieve and how they can help you.
Employee Relations
At the heart of employee relations is how engaged and motivated your workforce is. Sometimes SMEs can benefit from higher levels of engagement than large corporates because employees can see the value of their individual contribution more clearly, but in other cases engagement and retention can still present difficulties. Regardless, your HR professional will have a toolkit that can support you to make improvements. HR can provide you will the support you need to effectively manage issues with conduct, performance and any grievances that arise, ensuring you stay within the law and achieve the best outcome possible for your business. When it comes to building engagement, HR can assist by helping you to identify where the problems are (using surveys, attrition data and any other information you have) and leading on a plan to make improvements. This doesn’t happen overnight and your whole workforce may need to be involved, but HR can support by creating the plan, training and supporting managers in its delivery and measuring the results.
Learning and Development
You may have seen this quote circulating recently on LinkedIn:
“CFO: What if we train our people and they all leave?
CEO: What if we don’t and they stay?”
It’s flippant, but it represents quite well the dilemma businesses face when budgets are tight but people development is required. In fact another quote from Richard Branson gives advice on how to resolve this:
“Train people well enough so they can leave, treat them well enough so they don’t want to.”
This may sound idealistic, but combined with a strong focus on all round employee engagement, there is no reason why investing in your people should cause them to leave; in many cases the investment is valued so highly it causes people to stay. As the development of your business over time is heavily dependent on the capability of your people, Learning and Development is likely to be a core part of the HR strategy mentioned earlier. HR can help you use a performance management process to understand where your skill gaps are and direct your budget to addressing the areas that will have the most impact. Measuring return on training investment is not easy, but HR can help you with this too. HR can also help you pick out your top performers with the most potential so you can ensure that you are directly your investment toward individuals that will be future leaders of your business.
Reward
Occasionally a thorny issue in SMEs, HR can help you devise reward strategies that ensure your employees are rewarded equitably for their responsibilities and performance and also ensure that you are competitive enough in the market to attract and keep the right people. Again, business strategy/goals are important here; the right reward strategy will ensure you are encouraging the behaviours and activities that will make your business a success over the long term. HR professionals are also adept at helping managers to deal with individual cases where pay and benefits become an issue. Just one example of the many occasions when HR can act as a useful third party to coach managers in how to have a difficult conversation and facilitate the conversation when it happens.
Recruitment
Recruitment often receives a lot of attention because the costs can be so high; not just the punishing agency fees you often incur when you hire, but the cost of getting the hiring decision wrong. Lost opportunity, training costs, management time and of course agency or advertising fees can mean a mis-hire is a painful experience for everyone involved. HR can help you get this right first time by supporting and training your managers in how to run a fair and effective recruitment process. They will help you think of ways to fully assess candidates before you offer the job and help you manage the induction and onboarding process to successfully integrate your new hire into the business. HR can also help you reduce costs by thinking about how you position your business in the recruitment marketplace, making sure your employer brand does some of the work for you. They can also handle advert response and candidate communications and management, meaning that perhaps you don’t have to pay an agency for this. Employers have often heard horror stories of discrimination claims arising from recruitment processes. HR also has a role here – making sure not only that you stay within the law but that you can also prove it at a later date if you need to.
HR Service Delivery
Last but not least is HR service delivery. Perhaps not the most exciting area of HR, but this is the foundation upon which the rest of the HR offering rests. It’s unlikely that you will ever feel that this area adds significant value to your business, but if you get it wrong it will start to cause you problems in all sorts of ways. This area encompasses the administration and processes by which you pay your employees, ensuring contracts are up to date with the latest employment law, dealing with a myriad of employee queries, ensuring you have robust policies in place to use if you need them and the list goes on. If you are currently operating without HR then you might be finding some of this work is either painful or making you feel worried because deep down you know it is not happening. A HR professional can relieve you of this burden and ensure that these areas of compliance and administration run smoothly. This is unlikely to revolutionise your business, but at least it won’t cause you problems.
To sum up, HR is a function that will take full responsibility for creating and delivery on a people agenda that is right for your business. The remit is broad and the tools used are varied, but you can expect to see an effective HR professional take compliance and administration issues off your hands, whilst implementing strategic people based initiatives that make your company a better place to work and better equipped to achieve its short and long term goals.
How we can help
To understand how an effective HR provision could impact your business, contact our expert HR consultants today on 0330 223 5253 or office@fitzgeraldhr.co.uk.
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