Small Business: when to recruit a dedicated HR Manager?
Small companies rarely have a formal HR department. Instead, HR duties are distributed among the CEO and other departments such as the accounting or financial services.
Over time, this approach may affect, directly or indirectly, business performance and growth, resulting in:
- Non-compliance, wrongful interpretation of labor legislation (*), resulting in penalties, unexpected expenses due to litigation, or even criminal convictions;
- Other services unable to achieve their business objectives, because they’re consumed by HR tasks that are beyond their scope of expertise;
- Recruitment mistakes: a bad hiring decision can result in measurable costs including termination payments, legal and recruitments fees and the new hire’s induction and training costs. But some other outcomes are much harder to put a price on. Those may include any of the following:
- quality issues, clients or productivity losses;
- work disorganization, other employees getting burned out to compensate;
- damaged employees’ relations and morale;
- Managers’ or company’s reputation damages.
- Unclear roles and decision-making processes, impeding operational and strategic decision-making;
- Internal communication mistakes: informal instructions or decision making, glitches in the information or communication loop, short-circuits in decision making, poor Top-down and Bottom-up communication; resulting in frustration, employees’ disengagement, poor performance and productivity losses;
- Individual or collective performance issues: due to changing or unclear objectives, a lack of visibility on business orientations, a lack of resources, of information, of training and induction … ;
- Occupational health and safety risks;
- Damages to the company reputation…
The HR professional – creating value:
Hiring an HR professional can increase compliance, reduce costs and defray risk. Still, an HR specialist will add much more value than this to your business. Here are a few common scenarios on how HR expertise can positively impact operations:
- Building an effective Management Committee: assistance to building and implementing the Committee, clarifying strategic orientations and cascading them through the organisation, refining internal communication flows and ensuring that individual objectives are aligned with departmental and strategic objectives.
- HR mentoring of first-line managers:
- helping first-line managers to turn HR tools (annual appraisals, people reviews, salary reviews …) and obligations (such as professional interviews) into management and people development levers, and business growth opportunities;
- in obtaining and cascading information, turning business orientations into operational objectives;
- in developing internal communication good practices and an effective management behavior.
- Successful recruitments:
- use strategic workforce planning for effective recruitment;
- involve managers from needs’ analysis to the new hire’s induction (**);
- develop employer’s brand and use digital communication to attract talents.
This is just an insight of how HR expertise can positively impact productivity, individual and collective performance, restore confidence or reduce turnover.
HR specialist, HR Manager, HR Director: which profile is the most suitable?
The HR profile will vary with the Company’s organisation, size and growth’ capacity, but also depending on the specific issues to be addressed and on the available internal HR resources or skills.
When the company still has hesitations on long-term needs or on the most suitable profile; but still has to face pressing HR challenges, using the services of an interim HR manager before bringing someone in-house is the ideal solution.
The interim HR Manager/ Director will be able to:
- address immediate HR issues within the scope pre-agreed deliverables and during a limited period of time;
- understand the business organisation, culture and stakes;
- help defining the most suitable HR profile and position in the organisation chart;
- participate to the recruitment of the HR manager and ensure appropriate induction, skills transfer and training.
The cost of an interim HR manager shouldn’t be regarded as a cost, as the ROI is much higher than the cost: it is an opportunity to reduce short-term, mid-term and long-term risks and costs, and also an efficiency, productivity and profitability source. In other terms: an investment for the future.
Add value to your business: invest in an Interim HR Director
(*) examples based on real cases:
– Inability to apply a disciplinary sanction or control an employee due to the absence of provisions in the internal set of rules;
– Litigation due to non-compliant working contracts clauses (such as working-time or non-competition clauses);
– Improper application of labor legislation on working-time and non-compliant working-time monitoring system: employer condemned to the retroactive payment of overtime and nullity of « forfait-jours » clauses pronounced by the labor inspection.
(**) Most bad hiring decisions are due to improper staffing/ skills needs assessment