Getting Human Resources Management right in Start-Up’s and SMEs
The greatest asset that every organisation has are its people. Throughout all stages of the organisational life cycle, the challenge of getting the people piece right forms the basis for how successful your organisation will go on to become.
Human Resources (HR) Management and the steps to getting the right processes, practices, policies and ways of working are vital. But perhaps especially so when the organisation is first starting out and evolving in its stages of growth.
The central functions that HR will become responsible for as your organisation establishes and commences its operations will typically include:
- Training & development
- Payroll management
- Leave entitlement
- Policy and employment law
- Organisational culture
Yet when entrepreneurs and innovators are first starting out with their ventures, the very nature of start-up’s, being fast moving, agile, nimble and oftentimes chaotic operations. Can result in anything considered as being secondary to the business operating successfully, being placed on the back burner.
However the failure to have a good HR strategy from the outset can be a ticket towards failure in the future. When we acknowledge the critical nature of people to success, it’s easy to see the benefits in developing a strategy from day one that will work with you as your organisation evolves.
HR in Start-ups
Human resources plays a central role in developing and embedding a positive culture. It’s the very culture of your startup that can be the make or break formula in attracting the talent you need to help take your vision forward.
A survey by Glassdoor in 2019, on Mission and Culture found that prior to applying to work for an organisation, four out of five applicants sought to find out their prospective employers, vision, mission, values and goals. The results indicated there is an expectation that this number will increase significantly. Given that 65% of 18-to-34-year-olds are predicted to prioritise the culture of the organisation above salary.
Company culture is one of the main reasons that almost two-thirds (65%) of employees stay in their job
HR in start-ups are also critical to the success of many key elements that cover both risk and reward. Here are several of the central areas that are beneficial to the start-up founder to hand off to a Human Resources practitioner.
- Talent Acquisition – Hiring for startups can be a complex process involving strengths in outreach, networking and negotiation. The challenge that pre-seed of earlier stage start-ups have is they aren’t well known on the wider labour market and can’t offer the stability, reputation and package offerings that more established organisations can. HR can not only face off the nuances of start-up talent acquisition. But can also establish strong relationships and commercial arrangements with third party specialist recruitment agencies.
- Policy Development – The policies that are developed in the early stages of starting up set the tone and lay the foundations for the ways in which your people are supported, and the business is fulfilling its obligations to those employed. The range of policies required will develop from those that are required legally for the organisation to operate. Through to become policies that are enhanced to provide a competitive advantage to market competitors.
- Record Management – Even the earliest stages of organisations will benefit from having a secure record management system. The details that will be held about your employees will include everything from their personal information, bank details to be used for payroll, medical information and details about their role and performance. It’s easy to fall into the trap when starting out to think that investing in a record management system isn’t a priority. Yet the advantages of embedding Sage HR from day one, ensure that everything you need to get right on the record management front is in place and your record keeping is one less thing to think about.
- Training & Development – Co-founder of Southwest Airlines is renowned for his “hire for attitude, train for skill,’ quote. Which makes it clear, his view is one that believes in the power of training and developing people upward. In fact the upward mobilisation of talent is an excellent way to retain employees, rewarding those who demonstrate capability for increased responsibility with investment in their potential. Training and development in start-up organisations is oftentimes neglected thanks to the pace required to grow rapidly. Yet the cost of training and time taken to invest in it, are factors that will yield advantages to the start-up as it moves into SME territory and beyond.
HR in SMEs
Whilst the status of being an SME can technically apply to micro businesses and sole traders. In the broadest sense SMEs are organisations composed of 250 employees or less, with a turnover of less than £50 million per year.
The UK is home to 5.7 million Small to Medium Enterprises and amongst them the challenges of effective management of HR can range from the small to significant. Yet as organisations who have grown beyond their initial startup stage to become an established enterprise are faced with the need for more structure and strategy.
HR in SMEs is therefore more about refining and developing the initial HR strategy to meet the demands of the larger operating structure.
- HR Strategy – Business leaders of SME’s have an opportunity to align what the organisation’s goals and values are with what they specifically want from their HR function. The needs of the business typically connect through to direction for HR and this can shift in accordance with the particular needs of the business at that time. The priority strategies at your organisation could be the need to focus on driving recruitment drives, or uplifting your policy suite. By formulating a strategy and plan to achieve these goals, the SME can uplevel effectively.
- Connect & listen to your employees – Engaging with the voice of your employee base can be crucial in formulating your SME HR strategy. The additional benefit of these efforts can also be realised through the development of your employee value proposition, As such, employee surveys, 360 feedback and ongoing talk back sessions with your people are all helpful steps in the pursuit of SME’s connecting with the people who drive the organisations goals forward.
- Evaluate the organisation’s employment life cycle – The key stages of the employment lifecycle such as policies and procedures, performance issue management and organisational efficiency, effectiveness along with delivering on the overarching objectives and aims of the organisation.
The outcomes and advantages of getting Human Resources right for your organisations are vast. Partnering with a solution provider like Sage HR who specialise in HR software solutions for small, medium enterprises can make all the difference as you grow.
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