Good practice in HR for larger businesses

In Ruth's newest article she talks about human resources in business, whether that be you yourself, an out-sourced specialist or your own internal department. The do's and don'ts and her own personal insight into how to succeed in making your HR work for you.

Ruth Badger Business logo consultant

In my mind I split the different elements of a business into two sections, revenue generating and non-revenue generating. It won't shock you that the latter elements don't excite me nearly as much and Human Resources (HR) is a big part of that. Regardless of my personal taste this is not an area any business owner should take lightly and without due attention can end up costing you time and money.

Many advisors will tell you that HR is clear cut. I would disagree here and tell you that HR is a grey area and the law is down to interpretation of the circumstances that surround the issues. With all of the government changes to employment law it can be tough to keep up to date while running a business through challenging times so this is where I hope to help. Having owned a HR support company I want to give you some concise, no nonsense advice to the does and don'ts of HR. It is impossible for me to cover every point but without knowing the important parts you can't focus on generating revenue!

If your business has more than 40 staff you need a full time, fully qualified HR person to do the role justice. The advice I will give in this blog will not cover the day to day of HR but rather offer advice on how an HR manager should benefit your business. For HR to make a commercial contribution to your business you have to employ a commercial thinker, someone who is pro-business as well as caring about staff welfare.

Notes on what makes a good HR manager

  • Recruitment should never be fire fighting, make sure your manager is forward planning when searching for and hiring new staff.

  • Poor or non-existent induction of staff results in trouble further down the road. An HR manager will share this opinion and be consistent with all short-term and long-term training.

  • They will be experienced and efficient in managing a cost centre or planning a staff budget. They will stay abreast of your staffs' absence levels will actively manage sickness.

  • Bold communicators will push issues with difficult staff but remain fair and understanding.

  • Whilst acknowledging the business objectives and culture an HR manager will understand that a successful business needs happy staff.

  • They should be up to date with employment law!

  • All going well a great HR manager will increase your staff retention and development, decrease absence, improve morale and promote an open and fair work environment.

Good and bad HR managers

If you have the right member of staff in HR who fulfil all of their objectives they will more than cover their salary with the savings they make for your business.

Where an appointment goes wrong is when you employ a HR manager who has no commercial sense and really just wants to be the ear for staff, they will then add no commercial contribution. Likewise you want a HR manager to be sensitive to your staff essentially holding both parties interests at heart.

In all my years in business I have come across more bad HR people than good and it is crucial for any owner to keep abreast of what is happening within their HR team. Good, strong management from above will ensure that you protect your business from poor HR decisions and ensure that you have a commercial thinker.

How you do this is easy! I have listed below my key tips to successfully managing a HR manager:

  • Include them in your senior team so they can contribute and buy into the business objectives and direction.

  • Make them accountable for the HR strategy which should include staff budgets, management of cost centres and recruitment.

  • Set them objectives to report on the key elements of HR such as staff numbers, recruitment, staff cost base vs. budget and absence costs.

  • Ensure they report monthly on performance management issues, disciplinary updates and tribunal updates.

  • Have them work closely with your finance team to perform in-house management of your payroll.

  • You need to ensure that they act as an advisory point to your management team on HR issues and not do everything themselves. Good HR managers ensure issues don't get to the disciplinary point through coaching and training of managers and not taking over when a manager has problems.

  • Ensure their decisions are made with a balanced and informed opinion and always with the company in mind.

Legal action

Larger businesses are more prone to being taken to an employment tribunal than smaller businesses.

  • Manage your risk! I really hate wasting time and as an employer, tribunals are just that as they will never earn me money.

  • Process! Settle out of court if you have not followed the correct employment law processes because you will lose at tribunal.

  • In order for you to win at a tribunal you have to be factually right so remove the emotion! Even if the member of staff you are fighting has a bad attitude, horrendous performance record or is aggressive - unless the case is based on fact the tribunal panel will not side with you.

  • Finally don't let it consume you or take it personally! Employment law is down to interpretation and a judge doesn't always have the same view as you so if you lose do not let this distract you from your business. To run your own business takes guts, strength and intelligence.

Even if you have an HR manager there are still responsibilities you have to maintain in your business. I always strive to have an achievement culture in all the businesses I run. Your work practice is set by example, by you, as the boss. If you have a culture where basic standards aren't adhered to and staff issues are not addressed you will cause your very own HR nightmare. Open and direct communication and proactive problem solving are the only way to deal with HR issues. Most problems simply won't occur if your staff have the chance to express problems or if you raise them yourself in good time. A good boss needs to be fair, consistent and honest to create a healthy culture and to address those staff that aren't working with the same ethic.

To accompany this article I have created two downloadable and printer friendly check lists: