If you have more than a handful of employees, chances are you will need some form of Human Resources (HR) support for your business, whether it’s a single HR employee, a HR team or an outsourced HR company.
Regardless of who is providing the support to your team, there is a significant difference between a strategic HR and operational HR team.
The impact to your business can be very different.
A strategic HR function is measured like any other part of your business, increasing sales revenue, decreasing costs and ensuring you are legally compliant. A strategic HR team will still need to ensure the day-to-day HR activities are completed. However they have a broader and longer-term focus.
An operational HR team in contrast, focuses on the day-to-day activities (which are important, however they may have less of an impact on the successful growth of your business).
A good overall HR strategy will make a big difference to the success of your business. I often hear from business owners that there are times when they find HR more of a hindrance than help. Here are three reasons why:
1. When your HR is reactive rather than proactive
If your HR team are only there to respond to employee issues and crises, they are performing a very small part of their function. As well as responding to issues, as and when they arise, HR departments also need to ensure they are dedicating time to planning and strategy.
By having a proactive HR team, you are able to ensure your business has the right skills, people, structure and processes to maximise the potential of your business through your capable employees. You will also be able to ward off many employee issues before they arise with the correct HR practises in place.
Business owners may find HR a hindrance if the HR team is not ahead of or keeping up with strategic planning.
2. When your HR adds unnecessary red tape to your business
Commonly we see businesses whose HR area have created forms demonstrating how to complete a form that populates another form for an approval process. Then HR wonders why business managers dread getting HR involved in business decisions.
In good HR practices, there is no doubt a time and place for solid, compliance documentation and processes. However, HR need to be careful not to make systems overly complicated or time consuming for managers and staff. HR should be focusing (like all other parts of the business) on how to ensure their processes and systems are using effective and efficient systems, and provide the tools to make people’s jobs easier, not harder.
HR should also ensure that every activity they undertake has a commercial focus and makes a positive (or achieves the most favourable) outcome for the business.
3. When HR activities are costing your business a fortune with no regard to Return on Investment (ROI)
Good HR practices require adequate investment (time and dollars) to get results like any other part of your business. There are times when HR practices are introduced into businesses with little consideration to the commercial need or ROI.
There are so many amazing people initiatives that companies can introduce to their business to increase productivity, engagement and morale. However, some HR functions and individuals can get carried away introducing initiatives because “they look great” even though they make no or little impact to the output or engagement within the business.
It is really important that HR is held accountable for what they introduce into a business and that they are adding value, not introducing cost and process for little return.
Make sure your HR department, person or consultancy is working to enhance your business and make life easier for you and your employees. Good HR can provide your staff with the tools and support to reach their full potential.
Poorly managed or careless HR can leave them stifled and frustrated. They can even drive your best employees away. HR should at all times have the same vision and focus as that of the overall business strategy.