Why use HR proactively in your small business?

Jan 12, 2015 | Business Principles

One of the things we do at face2faceHR, as most businesses do, is monitor where our clients come from. Obviously this is useful for marketing purposes, but the other aspect we can see when we do this is under what circumstances clients arrive. What has prompted them to get in touch with us?

New clients (or indeed ad hoc infrequent ones) broadly fall into two camps. Those for whom things are going well, but who are conscious that their business is either growing, or is planning to grow, and who want to get good HR documents, advice and support in place in advance, and those for whom some crisis or other has erupted and they need urgent support.

Most of our clients are fairly small businesses, where cash is usually not plentiful, so it’s probably not surprising to hear that more of them by far fall into the second category. Sometimes sorting out their HR has been something they’d been meaning to get around to, but they are busy and watching the pennies so the thing that actually prompts the phone call is something of the last straw variety. Perhaps a grievance has been received, or they’ve reached the end of their tether with someone.

We’re happy to help in those circumstances, and usually those clients settle into a more regular pattern of support once the initial crisis has been dealt with. But we think it’s far better for any business, small or otherwise, to take a bit more of a proactive approach to HR, and not wait for that crisis. There are four main reasons for this and they all impact on your bottom line.

Who has the time?

Being proactive about HR support can save your business huge amounts of management time. Those clients who come to us in a crisis or at the end of their tether are frequently on their knees and incredibly frustrated at just how much time they or their managers are having to spend on employee problems. A disciplinary, a performance management problem or an absence problem can all be massively time consuming, and business owners and managers’ time is without exception better spent elsewhere if possible.

But there’s a secret. All these employee problems take up far less time if you catch them earlier. The longer a problem drags on, the more time consuming it becomes. Getting proactive with HR advice and support will mean problems or potential problems are either avoided altogether or at least identified much sooner, and you will get the advice and tools you need to address them effectively early on. This frees you and your managers up to do what you should be doing, making money for your business.

It’s all about the money

Business owners will be well aware that their managers’ time is money. Time spent by managers dealing with dragging-on employee problems is time not spent on those aspects of the business that bring in the cash. In addition to that, employee problems can result in legal fees, expensive payouts to staff, higher HR consultancy fees, and even tribunal compensation. On the slightly less dramatic side, even something like problem sickness absence not addressed soon enough can increase sick pay bills, incur expensive temporary or agency staff bills, and cost in lost productivity.

Happiness is…

Your staff morale is crucial to business success, and proactive HR can improve this dramatically. If you own or work in a small business where there has been an employee problem, you will know the significant impact this can have on a small workforce. It can be like a cloud hanging over the team for months. If staff feel employee problems are not dealt with effectively or soon enough they can feel resentful. Using proactive HR to prevent problems in the first place or address them sooner will have a positive impact on your whole workforce. Reduced absence rates, reduced staff turnover and feeling treated fairly is good news for everyone.

As well as preventing problems, proactive HR can help you manage staff in such a way that they feel valued, developed, motivated and engaged in the business, improving performance and making for a better place for everyone to work.

Who doesn’t want a high performing business?

Proactive HR can help you make the most of your staff and have a dramatic impact on performance. Performance management isn’t just about dealing with poor performers, it’s about making sure performance of all staff is monitored and improved, even if they are performing well already.

It’s about identifying development needs (and solutions) early on, supporting high performers and improving lesser performers, making sure the business is making the most of the skills it has available and ensuring that your whole workforce continually improves and develops. Productivity goes up, staff turnover goes down and sales increase.
It won’t have escaped the savvy business owner’s notice that actually all of these reasons boil down to the same thing; money. Proactive HR improves your bottom line by saving your business money and increasing your business’s revenue through improved performance. What’s not to like?!

If you have any further queries and need some advice, do get in touch.