Growing start-ups and SMEs is no easy task. Business owners seeking to do so often find themselves lacking resources and funding that are usually available to large companies and MNCs. However, for what they trade in resources, they often gain far more flexibility than the gargantuan nature of large companies allow.
Most SMEs and start-ups see HR as a chokehold that holds back this flexibility. This does not have to be the case. You can strategically organise human resource and hiring in your organisation and remain flexible.
Since flexibility is one of the few major advantages SMEs have over larger companies, growing SMEs must rely on it as much as possible. This means they need to be able to fall fast and pivot with no serious concerns. Therefore, they don’t prioritise structured HR and recruiting practices. There is a misconception that HR is a corporate culture killer that threatens flexibility and innovation.
However, if the company remains unstructured and the recruiting processes are left unchecked, they can be disastrous and do more harm than good. They create confusion, foster toxic work relationships, and negatively impact employee morale as well as employee retention.
A proper HR structure in start-ups and SMEs will help the business become better at hiring, retaining employees and developing said employees. Additionally, it can help employees and their contributions feel valued.
Among some of the improvements in hiring that come from effective HR is the ability to create comprehensive job titles and descriptions that are not discriminatory. Structured HR allows companies to come up with accurate job titles and descriptions that will not only entice qualified candidates, but also minimise the risk of potentially misleading them.
Having such a HR system in place also enables SMEs to properly observe state and federal labour laws. These are crucial legal matters that all start-ups need to understand. The HR staff helps you understand the complicated legislation and how it applies to your business to avoid lawsuits.
This also ties in to employee retention. Benefits and compensation are a huge part of HR. A properly structured HR system will enable start-ups to compensate workers fairly. Fair treatment and compensation is a major factor that leads to happier workers, and thus higher retention.
It is also the responsibility of the HR department to assess the position and determine whether a pay hike is worth it or not. If you develop fair compensation practices, it also prevents you from developing unfair pay gaps.
The company’s entire leadership can be seen reflected in their HR department. To create an HR department that is flexible and creative, you have to value flexibility, so as to not fall into the same sinkholes that larger companies fall prey to.
Some practices that the HR department can adopt while remaining flexible includes eliminating jargon and ‘hard and fast’ policies. Jargon can often be confusing and some employees may feel alienated by them. They can lead to misunderstandings if not clarified and HR should minimise their use as much as possible.
As for hard and fast policies, going strictly by the book in every aspect of the company is outdated. As a start-up, you don’t need to have hard rules that govern every aspect of the employee’s office life. Especially for employees of today who value the work-life balance far more than in the previous generation of workers.