Business Basics: HR tips and best practices for growing businesses

21 November 2016

Welcome to the second instalment of our Business Basics series, where we’re continuing to share news and guidance on a range of business-related topics. In this series, we hope to provide interesting business features that may be useful to SMEs, as well as general industry insight for businesses of all shapes and sizes.

In our previous Business Basics feature, we spoke to Emma Jones, founder of SME support network, Enterprise Nation, about how small businesses should approach scaling up during times of change. Today, we’re collaborating with HR specialist, Jan Sargent, to provide a few top tips for HR best practice in the workplace.

HR Tips for Growing Businesses

Jan is an HR and Leadership & Teams Specialist, and is director of consultancies at Transforming Performance and The HR Dept. We spoke to her about some of the key HR considerations small businesses should pay attention to, as well as some of the steps employers can take to motivate their workforce.

Jan Sargent The HR Dept

Check out our full interview with Jan below to discover her best tips for HR success.

What are the key HR considerations that small businesses need to pay attention to?

It’s important to take care when recruiting staff; after all, employees are a huge investment of the business’ time and money. A haphazard and unclear approach, which leads to getting the wrong person into the business, can cause a lot of damage and stress, and may take considerable time to recover from. How you treat people – both positive and negative – sends messages to both those within the business and those outside your business.

‘Paperwork’ can be seen as dull and boring, but it’s important to keep up to date with the contracts and handbooks for your business. These documents set the foundations, standards and boundaries of the employer/employee relationship, helping all parties to know what to expect from each other. They communicate the things that are important to the business and help to protect it should things go awry.

What can employers do to motivate their employees and keep them engaged with the company vision?

Have a clear vision, communicate it thoroughly and keep activities focused on achieving it. Be clear with employees about how they play their part in the wider business, and show them how important they are in moving the business towards its goals. Trust them to do their job and don’t micromanage – fair delegation is best practice for companies, big and small.

By allowing people to do their job with as much autonomy as possible, you allow them to be creative and try new ways of doing things which could benefit your business. As businesses become more and more complex, and as the speed of change increases rapidly, companies need to trust and empower their staff to do the right thing, as long ‘command chains’ are too slow to deal with issues that need to be resolved quickly. Staff should know how to make the decisions because they understand the goals, their part in the achievement of them, and the values context of their decision-making.

Small businesses often have limited time and resources available. What best practices can they follow to ensure a smooth recruitment and interview process within these limitations?

Actually having a process is a very good start! Ensure you know what the role looks like, what qualifications the role needs, and what skills and experience the person should have. Understand what you can offer in terms of a remuneration and benefits package. This will help prospects to self-select in or out of the process – the benefit of that is it’s better to have candidates who are realistic about what the role is offering them from early on in the process, rather than have people who are not going to be the right fit and perennially unhappy if they are appointed.

Think about the ways you can help candidates to demonstrate the qualities which you are looking for within an interview setting. Ensure that the venue and interviewers are prepared for the interview. After all, the interviewers are going to be investing the business’ financial and time resources in an individual, so you want the recruitment decision to be based on them finding and assessing good quality information about the candidates as well as giving good information about the company and role to the candidates, too.  As well as you seeing whether candidates would be a good fit for your business, candidates too are looking at the business and seeing whether it is the right fit for them.

recruitment interviews small business

Dealing with employee complaints can be a tricky process for small businesses. What tips do you have for managing the process with impartiality and transparency?

Never assume. It’s essential to listen impartially to the person’s complaint. When you are seeking ‘evidence’ of the matter that is being complained of, look for evidence that could support the complaint as well as that which might refute it. Gather information in an impartial and objective way before coming to a balanced conclusion. Follow the ACAS codes as a minimum, but, if your internal policies are enhanced versions of the ACAS codes, ensure you follow these too (assuming they are compliant). Employees winning claims on a ‘technicality’ are frequently related to businesses not following their own policies and procedures.

What are the pros and cons of outsourced HR vs in-house? Should businesses of different sizes pursue certain options?

Smaller businesses probably don’t want or need a full-time HR professional within the business, but it is nevertheless vital that they lead and manage their staff ethically and legally. Engaging outsourced HR specialists to support the business with this is of huge importance if businesses want to get the best from their people.

Once a business gets bigger, they do start to need a more dedicated HR service – this can still be provided by an outsourced service, or an in-house provision can be made. I would always recommend that whatever the choice, qualified and experienced HR support is essential. HR specialists can ensure that the foundations of people management are in place and can guide managers through the legal maze of employing people as well as developing the right people management approaches with leaders throughout the business.

small business hr legal requirements

How can businesses ensure they’re complying with all the relevant legal requirements regarding their employees?

Employment law is fast-moving and ever-changing. It can be very hard for businesses to comply with it all on their own, so my recommendation would be to have a retained contract with a reputable, qualified and personal HR service which gets to know you and your business and can, therefore, give you information that relates specifically to your situation. It’s a good idea to ensure your managers have a grounding in how to manage within the law, and to always talk to your HR service provider when you have an issue. They can help to guide you through tricky situations before they become a horrible mess.

What are the most common HR mistakes that growing businesses make, and how can they be avoided?

Businesses are busy places. People are busy trying to do whatever it is the company sets out to do in their marketplace. What often gets forgotten is that staff actually need leading and managing – they need direction and encouragement. Often, individuals are promoted into the role of manager without any support or training and are left to flounder. They may be ‘technical’ or ‘functional’ experts but don’t necessarily know how to get the best from the people they are now leading.

Businesses often have either no contracts or handbooks, or those they do have are out of date. Neither situation is good and they can leave both the employer and the employee overexposed in the event that things go wrong. Have these documents drafted by qualified professionals and keep them updated. Communicating those expectations is also important so that people know what is expected and what they can expect in return. A light touch is, hopefully, all that is necessary. So many problems happen down the line because people weren’t aware of what their obligations were and they then fall foul of their employer.

SME Business Employee Review

Which are the best ways for small businesses to manage employee performance issues? How can they review, analyse and appraise efficiently and fairly?

There’s a lot of contradictory conversation out there about how helpful performance reviews are. Whatever you do, don’t do nothing. People need to understand their part in the business and how they contribute to the goals and vision the business needs to achieve. It is important that they have responsibility and accountability, and their progress is discussed at regular intervals. So, whether you have a more formal annual process with more regular informal chats in between or you have weekly ‘check-ins’ with your employees – make sure you remember to have them. Don’t forget to keep notes so that it is easier to track employees’ progress towards their goals and tasks.

How can small businesses develop their employees at reasonable cost, and what can they do to retain skilled employees that they’ve invested in?

Giving employees opportunities to learn doesn’t need to cost the earth. Development opportunities can be found in giving them work which stretches and challenges them to use less-developed skills. Encourage them to find new ways of doing things. Encourage them to collaborate with their colleagues. Find opportunities for them to work with people who are more senior and experienced to stretch their horizons and help them to grow. Instigate a mentoring scheme so that more senior employees can share their knowledge with those wanting to grow their skills. Encourage cross-functional teams for projects. These are just some of the things businesses can try to engage and motivate their staff every day.

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