Back in the day, human resources was referred to as personnel. Personnel handled all aspects of employee management—from hiring to firing to payroll. Eventually companies started branching out and creating true human resources departments. HR focuses on management, recruitment, retention, and conflict resolution, while payroll handles the aspects of payments and insurance.
Unfortunately, in too many small businesses, the human resources department fails to deliver. This happens for a wide range of reasons:
- HR manager has been given human resources duties, but he or she has insufficient training
- Not having documented policies and procedures in place, which includes developing a handbook
- Handling situations inconsistently, which only confuses employees and causes them to lose faith in management
- Interference by owners or senior management into human resource responsibilities can derail the efforts of HR
If you’re struggling with these or additional challenges, your small business will likely benefit from bringing in an HR consultant. He or she can provide strategic support, perform a compliance audit, and generally be available for HR questions and emergencies as they arise.
If you feel like your human resources department isn’t efficient, here are five ways it could be failing your company.
1. You Don’t Offer Competitive Compensation
You need to attract top talent, but you also need to retain that top talent to remain competitive. While HR doesn’t create and distribute paychecks, it does set the compensation for jobs offered by your small business. If it doesn’t do its research to identify the competitive compensation rates, especially for the position and requirements, you may not be able to attract the talent your small business needs to succeed.
2. HR is Making Job Applications Too Complicated
How complicated is the application process? Is it haphazardly put together and more of an afterthought? Most small businesses don’t realize how the application process can hurt their recruitment efforts. For instance, if a candidate has to write a mock report or other writing assignment, he or she may skip your application for a competitors’. Your application process needs to be well defined while also being as simple as possible to complete during this first phase.
3. Performance Reviews Are Non-Existent
While your human resources team may be busy, it should never be too busy to lead the performance review process by setting up meetings between employees and their managers. Reviews communicate how well employees are performing, areas in which they need to improve, and a plan for making those improvements. When employees feel as though their work doesn’t matter, they don’t put much effort into their own productivity and performance.
4. You’re Not Hiring Skilled HR Professionals
Even if it consists of just one person, your human resources department needs a skilled HR representative to lead it. If the person has no human resources training or education, he or she is not going to be able to achieve your HR goals. It’s imperative that you hire professionals with HR experience or, if you don’t have the resources to hire someone full-time, consider outsourcing your HR department to a human resources consultant.
5. HR is More of a Part-Time Role
Is your HR representative also responsible for tasks in other departments? Human resources should never be a part-time endeavor. You need a dedicated professional to handle your human resources. When you have an employee who only works part-time in HR, he or she is not going to put as much focus into the department’s strategic goals and direction, employee recruitment, employee retention, and other key HR responsibilities—especially if he or she has another role they are expected to succeed in as well.
Ultimately, your HR department determines how successful your small business will be at lowering employee turnover rates. Hiring a qualified individual to solely head up your in-house HR activities—or engaging an HR consultant to help you with that—should be your first step. To learn strategies for reducing costly turnover, get your copy of Practical Tools to Manage Costly Employee Turnover today.