SIGNS I MIGHT BE UNDERDELIVERING IN HR
It can be difficult to justify the need to invest in a HR solution for your business, especially if you employ a small number of staff or haven’t experienced problems in the past. However, there are some indicators as to when it’s time to invest in HR.
Your business is growing
Your business is doing well and has started to grow. Managing your HR requirements alongside the growth of your business will help ensure you make the right decisions to continue its growth. You will need to take a more formal approach, ensure that you have the right structure and support in place with access to the necessary HR documentation including formal policies and procedures.
Pressure on productivity of your staff
As your business grows more pressure will be placed on your staff to produce more. This is a signal that you should start to recruit more staff to help manage demand. This indicates a greater need for HR management. You will need to develop a recruitment process, induction and ensure all necessary paperwork is complete as more people join your company.
You want to ensure you’re compliant
Many SMEs don’t fully understand what is required of them by law. You don’t want to unexpectedly put your business at risk of an employment tribunal claim, which can be very costly. In July 2017 employment tribunal fees were removed, leading to a 165% increase in tribunals in 2018. This trend shows no sign of slowing. This means everyone is at risk of being taken to tribunal. If you’re not compliant and haven’t taken the necessary advice, there’s a much greater risk of losing.
Employment law is changing
Employment legislation is always changing, which makes it difficult to stay up to date and remain compliant.
HR’s role is changing
Alongside this, the face of HR is becoming more demanding. Subjects, such as mental health are becoming more prevalent, along with a greater focus on company loyalty and employee benefits. This can make it difficult for small businesses to compete with larger organisations to attract and retain talent, which is where effective HR management is necessary.
SHOULD I HIRE A HR MANAGER
Once you’ve decided you need to invest in a HR solution for your business, you need to decide whether to keep the function in-house or look to outsource it. There are several factors to consider when making this decision.
Do you already have the expertise in-house?
Is there an experienced HR professional, who not only has the expertise but time to manage your HR needs? If you do, you could give that individual access to HR consultancy which will enable them to concentrate on their main responsibilities and develop confidence to be able to deal with challenging people issues when they arise.
How much will it cost?
As confirmed by Glassdoor, the average salary for a HR professional is £30,000. This is a lot higher than the cost of outsourcing for the same solution. The salary of someone with the expertise you receive from outsourcing HR will be a lot higher than the figure stated above.
Who will cover holiday/sickness?
Every employee is entitled to holiday and will have periods of sickness, even those who work in HR! If you’re reliant on one person to manage your HR needs, who will manage this when they aren’t working? If you outsource, you will always be covered and not dependant on one person.
When making a decision to hire or outsource your HR solution, it’s important to note that some HR management mistakes will not only hurt employee loyalty but can lead to tribunal awards and damage your Company’s reputation.
If you trust your HR responsibilities to an employee who deals with them part-time or doesn’t have enough experience, it can be very costly.
A solution which is both cost and expertise effective is to look at outside sources whether you have someone appointed internally or not.