Far from being the first priority for a growing business, HR can be something that small businesses actively avoid.
An HR department is a big step towards making a business feel corporate, and some people rally against that sense of sterility. The informal nature of the workplace in a small business and the way people are managed can be part of the appeal of working there.
But is this possible anymore, and was it ever a good idea? There’s certainly a scale on which HR is manageable by one person. But as a business grows even slightly, changes to modern workplaces mean HR can quickly become a rollercoaster of overlapping incidents, as personalities and requirements collide. So is it best to avoid these bumps in the first place—or simply to learn to enjoy the ride?
Queuing up HR issues
Many companies can persist for years without an HR department, HR professional, or even many formal HR processes. The realities of running a small business mean that there often isn’t enough work to justify hiring someone solely or primarily to deal with HR. These responsibilities naturally fall on the CEO, and become just another aspect of managing the growth of the business, as they try to create a harmonious working environment, and stay on top of any concerns or dissatisfaction.
This has never been ideal, particularly in times of high employment, where minor issues or slow progression can encourage employees to leave. However, a confluence of factors over the past few years have made it increasingly difficult. As well as a new generation of employees bringing new expectations and demands, the COVID pandemic changed the playing field, in more ways than one. As well as sparking a desire for more home working and general flexibility (which some employers are still trying to quell!), it has also led to more long-term illnesses, and both mental and financial repercussions which many people are still recovering from.
The economy isn’t doing much to settle that disruption, either. Many businesses in the UK are battling against tax hikes, and while wages are currently growing in line with inflation, they haven’t caught up enough to allow many employees to live comfortably. At the same time, jobs are now much more scarce than a couple of years ago, meaning people may feel locked into roles, and thus less likely to raise issues. This may not seem like an issue for HR, but in practice, it can mean issues continuing unaddressed for longer. The burden is then on HR to uncover and address them, rather than just reacting to problems.
Finding the balance
Where it may have been relatively easy to manage HR in a smaller company not so long ago, many businesses today can find themselves lurching from one HR problem to another. It’s a rollercoaster ride that looks a lot like one of those inflation graphs. In the grand scheme of things, many of these issues can feel like they’ve come out of nowhere. A long, serene climb for many small businesses has turned into a white-knuckle ride from one challenge to the next, whether that’s a dispute, benefits issue, or workplace safety concern.
This can be extremely difficult for businesses to manage. It’s one of the common transition points in the growth of a business that can easily throw you off track. Just as the balance between recruitment, wages, and new business can feel like you’re on a financial cliff edge, an HR department or formal HR policies are often something businesses feel they need, but can’t afford to invest in. It’s only when a serious HR issue eventually arises that their hands are forced, and they realise they should have invested in HR sooner.
HR isn’t a zero-sum game, and you don’t have to either have no investment or a fully-fledged HR department. But the moment that HR becomes a major and tangible part of your business can feel like you’re crossing the rubicon. It can be seen as a hallmark of becoming a large business, to the extent that as long as you see yourself as a small to medium-sized business, it feels like something you either don’t need or cannot afford. Unfortunately, this attitude can often lead to businesses ignoring HR until the consequences make themselves felt—either through a major incident, or the slow degradation of team morale and happiness, and the loss of key talent.
Making smart HR investments
As we’ve highlighted, the answer can’t just be to open an HR department, or even hire an HR professional. This simply isn’t accessible for everyone, or even necessary. But it also can’t be wholly contingent on one person within a business to manage every HR issue. An impartial voice is often important, and the weight and complexity of these problems today can be overwhelming, even in a small business—not to mention how they distract from equally important aspects of day-to-day operations.
So what is the solution? How can you get your company off the HR rollercoaster? Having acknowledged the issue, a good first step is to consider areas where you know HR may be lacking, but have held off introducing formal processes for, due to time or monetary constraints. Things like pencilling in reminders for annual reviews are seemingly simple, but can go a long way to limiting discontent among your employees, meaning that they don’t feel obliged to wait for a review until you remember, or until it feels like a good time to ask.
If you are committed to resolving most HR issues yourself going forwards, one option is to improve your ability to do this. This can include courses such as HR Essentials for Managers, which focus on improving your HR knowledge, increasing your confidence and capacity to manage HR in your business. However, it can also hone in on individual aspects of HR management, such as Conflict Management and Resolution in the Workplace, or Conducting Effective Workplace Investigations.
You can also look to delegate some HR responsibilities to other members of staff. The HR Essentials course is valuable here too, but so are leadership courses such as Managing Challenging Conversations, Managing Poor Performance and Difficult Behaviour, or Equality, Diversity & Inclusion (EDI) training. All of these courses help to build skills that defuse difficult conversations, smooth over interpersonal issues, and build empathy for colleagues in a way that can eliminate HR issues before they develop.
And finally…
HR is something that can easily get away from you as a small business, particularly when it’s rocketing from problem to problem as it has been in the past few years. If you sense that you’re struggling, now may be the time to consider adding a touch more formality, whether that’s investing in training to improve your HR skills, or hiring someone full time.
Our training courses can give you a better grounding in HR to make an informed decision. Browse our full range of HR courses here to learn more about what we offer, and how training could elevate your understanding of HR, and keep your employees happier and more productive.
