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Why do I need Human Resources (HR)?

by Richard Cuff Richard Cuff

4th Sep 2018

You know your business better than anyone else. You also are responsible for it and will do everything in your power to make your venture a success. It is, however, a fact that you cannot do everything once your business grows beyond a critical mass. This means that you will need to get help; AKA an employee or two.

Finding an employee that will put as much into your business as you would is almost impossible and if you ever find such an individual then you have hit the jackpot. Well done. For the rest of us we will have to make do with motivated, enthusiastic, hard-working employees and you should settle for nothing less. If your staff are not up to this standard then you should take action to ensure that this is the case.

HR is the best method of getting the most out of your staff and this is, generally, the majority of the people working for your company. If you don’t get it right then your business will not work as effectively as it should and this begins before you’ve even employed a single person. In short HR will be used to take on new staff (start), ensure that they are performing up to your high expectations (middle) and leave under the right circumstances (end). HR is something that all business owners do automatically with a greater or lesser extent of success, often hindered by a lack of time, expertise and enthusiasm.

HR is often seen as something that is unnecessary in a small business but it is much easier to get it right from the start than try to introduce contracts, policies and procedures after some time. People are generally resistant to change and sometimes you will have developed a culture of working which may have formed an unintentional contract term (even if no paper version exists) through ‘Custom and Practice’.

Example 1: A member of staff is not living up to your high expectations. What should you do? Things to consider: performance management, probation, performance reviews, disciplinary. The answer is rarely to dismiss without any warning. Do you know how to adequately conduct a disciplinary meeting?

Example 2: You have used a ‘self-employed’ contractor for some years and they now claim that they should have been an employee of your business meaning that they are due years of unpaid holiday pay. Do you know how likely they would be to succeed with a claim to an employment tribunal? Do you know the criteria to test whether they are an employee or not?

Example 3: If you mistakenly overpay an employee you should obtain written consent from the individual before deducting the overpayment from any future payments....unless you have a clause in your contracts to allow for this.

The most successful business owners know their limits and when they need help. Don’t think it is something you can ignore as few small companies become large without handling their HR well. All big businesses have large HR teams for a reason.

Make sure your foundations are sound before you build your tower.

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