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What I’ve Learnt About HR in Smaller Businesses

 I was recently invited to present to the Australian Human Resources Institute's networking group in the Central West region of NSW on the topic of "HR for Small to Medium sized Enterprises (SMEs)".

In addition to sharing our exclusive 8 Elements to Success through People© Model as a means to assess and prioritise value adding people-management practices in SMEs, I shared with the group few of the lessons I've learnt over the last 10 years about successful HR in SMEs (as distinct from driving HR in larger corporate businesses and organisations).

Hopefully, it provides some useful insight for others responsible for leading the HR function in SMEs. Here's a summary (in no particular order):

  1. Don't overcomplicate or over-engineer things, be practical and speak the language of small business: Do what you need to do to achieve a good result (not necessarily "perfection"), then move on to the next challenge/opportunity….
  2. Be prepared to educate and demonstrate ROI (Return On Investment) to business owners/management/Board members: Know your stuff, and do your research if you're going in to advocate for/ champion something (including the potential costs involved, and likely benefits).
  3. Be prepared for objections and ensure you have the support of key opinion leaders (at both staff and management levels): Find your champions and give them a voice.
  4. Act promptly in cases of poor performance/misconduct: "One bad apple spoils the bunch" as they say, and if you've got a smaller bunch of apples they will spoil quickly! While most people understand the need to recognise those doing a good job, letting the not-so-good apples "get away with it" can be just as damaging, if not more so, than not valuing your strong performers.
  5. Where possible, coach and support supervisors and managers rather than take on key responsibility for all "people problems": Take care to position HR as a support to people with the responsibility for managing others, rather than being seen as "the enforcer". Gaining a reputation as "the enforcer" will seriously detract from the opportunity for HR to add value to the business/organisation in other ways.
  6. Focus on recruiting right: Spend time, energy and resources if you need to, to run a professional recruitment and selection process. Most small businesses wouldn't spend $50,000 or more on a piece of plant or equipment without doing their due-diligence and shopping around, so don't be too hasty to fill vacant positions. Take a bit of time and thoroughly assess candidate suitability in multiple ways (eg. multiple interviews, referee checks, psychometrics, skills tests etc…), in order to optimise your chances of making a good decision.
  7. Ensure the business is compliant – awards, record keeping, terminations, WHS, superannuation, contractors etc…: And get help if you need it. Fines, reputational and other damage from non-compliance can cripple smaller businesses. Recent cases also demonstrate that the Fair Work Commission is also increasingly willing to find directors, HR professionals, bookkeepers, accountants and others personally liable for instances of non-compliance.
  8. Work on developing your fancy footwork, to navigate the divide between management and staff: Tact, discretion, confidentiality are vital skills for those with key responsibility for HR. DON'T try and be everyone's friend!
  9. Model exemplary behaviour: A pretty straightforward one (hopefully!). The conduct of those with responsibility for HR needs to be above reproach in order to gain the trust and confidence of others, and optimise their contribution to the business/organisation.
  10. Be passionate and excited: Recognise the value of good HR and advocate for what you believe. Be brave. If management/owners are wanting to do something that's not right, be prepared to say so – but outline why (risks, ethics, etc) and offer an alternative.


So what about you? What lessons have you learnt about successful HR in SMEs? I'd love to hear from you – This email address is being protected from spambots. You need JavaScript enabled to view it..

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