HR Strategies for SMEs – Part 2
In my last blog I looked at essential HR strategies that can help SMEs to mitigate risk and strategies to help retain and motivate staff. I’ll now share some HR strategies to help SMEs entering the business growth phase.
Procedures and Processes
Are you spending more time working IN your business rather than ON your business?
If the answer is yes, investing time in developing some basic procedures and processes can yield dividends while ensuring your business maintains the same quality standards you require.
This could be anything from basic recruitment processes, to performance management – anything that helps you to navigate processes more effectively or enables you to delegate and trust that things will be done right.
A decision matrix is an excellent tool for an owner to use in order to maintain effective controls, while being able to delegate and empower staff.
At Vantage Performance, many of the obstacles we see with SMEs is that owners feel that they have to do everything themselves, or that only they will be able to do it ‘right’.
Part of growing a business is letting go of control at some stage and a decision matrix can help you do this by clearly defining boundaries and parameters for your staff.
Similarly, if you are doing the marketing, accounts, business development, human resource and day-to-day administration in your business, consider what the opportunity cost is to you. Would you be better off hiring a part-time accountant if it enabled you to work on a strategic plan for the business?
Sometimes spending money on additional resources is worthwhile if it frees up your time to focus ON the business.
Attraction and Selection Strategies
How do you plan to attract the right staff to help grow your business? What experience will they have? What are the market rates for their skills? Why would an employee work for you over another company?
If you have an effective attraction and selection strategy, you will be much better placed to make effective hires. You will also need a good understanding of the competition and market rate.
While large organisations have dedicated remuneration experts, building relationships with knowledgeable search consultants, and having access to an experienced HR consultant who can guide you on market salaries, remuneration and retention strategies will ensure you are paying the right rates for the right people.
Similarly, it is important to link a workforce planning tool (defining when you will make hires and the cost to the business) with your overarching business strategy and budget.
Analyse your gut decision, and look at how different scenarios might affect your profit margin, growth and achievement of business goals. Most SMEs have finite cashflow and you need to make decisions that will provide the best return on your investment.
Management controls are essential for owners who anticipate a substantial growth curve in their staff. While ad hoc management and a lack of process and infrastructure may work when you are small, as the business grows it will be increasingly difficult to maintain quality standards and control.
Typically, owners in a growing business are busy trying to service their client and customer needs, which means they have less time to develop the right frameworks.
At Vantage Performance, many of our turnaround SME clients are organisations that have grown substantially over a short period but haven’t invested the time to establish effective frameworks and management controls.
In organisations I have worked with who invest in HR management, there is consistent evidence of:
- Higher levels of efficiency and productivity
- High degree of staff loyalty, motivation and job satisfaction
- Greater staff retention
- Increased business performance.
Nobody knows your business as well as you do, and there is no one size fits all solution when it comes to HR management. If you would like to improve the human resource management in your business, focus on the areas that are most relevant to your business.
Sometimes investing time and resources in HR management and development in your business will yield a positive impact. If you don’t have the resources in-house, consider engaging a HR consultant to help you grow your business.
Vantage Performance is Australia’s leading business transformation and turnaround firm – solving complex problems for businesses experiencing major change.