Home » Blog » You have a new business, do you need HR and what would they do for you?

We all know or should know by now, your people are your greatest resource. One way to be sure your business will succeed is to look after your employees. Treat your employees fairly, manage them well and provide them with opportunities and they will help you to achieve your ideas and ace your business plan. Treat employees badly or with mediocrity and they will under perform or leave.  Sounds simple doesn’t it?

One of the questions that plagues SMEs is ‘when is the right time to devote money to human resources?’ Well the answer is from day one.

So what exactly is human resources?

Human resources (HR) is the umbrella term used to describe the management and development of employees in an organisation. Ultimately, it’s all about increasing employee performance.

Traditionally HR focused on hiring, firing and the old-school annual pay review. These days HR has been positively reframed, covering a much wider remit. Basic functions of HR include recruitment, and onboarding, managing payroll and benefits, holiday management, training and development, employment law compliance and safety compliance.

In addition, HR today plays a significant role in developing positive business culture and improving employee engagement and productivity, both of which are critical to business success. Employee wellness and personal development are also increasingly recognised as essential aspects of HR.

Why is HR so important?

In the small business HR is easily overlooked. Many entrepreneurs get their businesses off to a flying start, but grapple with people management as the business starts to flourish. Managing staff takes time and it requires specific skills. HR is an area of expertise many business owners lack.

Regardless of skills, for many entrepreneurs, the value of HR in business isn’t always immediately apparent. With just a few employees, business leaders feel like they have their finger on the pulse when it comes to the people they hire and manage.

But as a business grows, leaders often find there just isn’t time to deal with day-to-day people management and recruitment and the focus on people can easily get lost. This is the costliest mistake a small business can make. Comprehensive HR is crucial for success. Without a talented team, your business falls down.

HR covers so much more than hiring, firing and pay reviews. It encompasses all aspects of people management, communication and is pivotal in building a positive culture. Get HR right and you are half way to making your business dreams a reality.

Consider the consequences of poor HR. When employees don’t feel supported, aren’t being given opportunities, work long hours, and so on, their motivation to perform is impacted. Under-deliver on effective HR and it has a knock-on effect on your bottom line.

Reputation as an employer is influential in attracting talent. It also impacts on customers. Take Uber as an example – plagued by a string of HR catastrophes from sexual harassment cases to ignoring employee complaints, the resulting bad publicity has undoubtedly deterred many from working there or from using their ridesharing services. Bad HR has destroyed Uber’s employer brand.

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