Good practice in HR for medium 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!

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.

The more staff you have the more important it is that you have the capability to deal with HR issues efficiently. As a medium sized business owner there are a number of key factors you have to consider when discussing HR:

  • Recruitment - as you are likely to grow or replace staff

  • HR administration

  • Day to day management of sickness, holidays etc.

  • Legal compliance and liability

  • Performance management

  • Training and development

  • Disciplinary procedures

 

You have to be commercially minded when weighing up how to ensure the HR in your business is dealt with. It's important that you acknowledge that if this is not done properly it could be a financial risk. As the owner of a business personally, I know that the less I have to do with HR the better but I also acknowledge that if it is left unmanaged it will end up costing me money.

In doing this you have 3 options:

  1. Go with a big HR outsourcer. They can provide you with a DIY handbook, copy of all contracts and a call centre for advice. The positive to this is that outsourcers will indemnify all of your HR liability if a case goes to an employment tribunal and you lose. The negative is you are one of many clients and when you call up for advice you are dealt with by a call centre thus rarely getting to speak to the same person twice.

  2. Engage with a local solicitor firm who provide HR support. The positive to this is they are normally cheaper and again they provide you with a suite of legal documents and handbooks. The negative is that the advice you get will always be legal but not always the most commercial and solicitors will rarely provide indemnity for the advice they give.

  3. The final option is to engage with a HR Consultant who will provide you with all documentation and come on site to assist you with issues. The positive is that the right consultant will coach you, attend meetings and gain an increasing understanding of your business and staff as they visit.

Set the Culture

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 any 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.

Disciplinary and Tribunals

My rule of thumb about employment tribunals is to simply not get to this point because by then both parties have already lost!

The member of staff has lost because they have lost their job and you have lost because the time, money and stress you will go through are not worth the hassle or the battle! All disciplinary actions other than gross misconduct can be avoided through good communication and management as no boss or member of staff really wants to go through one. A disciplinary normally results because of three things, either poor performance, capability or mainly an issue relating to an attitude problem.

Performance and capability issues can be addressed and solved by good communication, factual evidence, training and action plans. Attitude issues can be addressed within good management of the probation period, open communication (dealt with on the spot if an example is observed), regular meetings and honest factual conversations pointing out the unwanted attitude.

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