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In today's fast-paced business environment, many entrepreneurs put HR priorities on the backburner. After all, owners are typically busy dousing fires in their day-to-day operations. However, "people" are definitely the single most important asset in your business. The task of hiring, developing and retaining employees can be costly, so taking a close look at your HR investment is crucial to success today.
Where to start?
Size yourself properly
Determine exactly how much you want your company to grow. Do you want rapid growth requiring the kind of employees who thrive on intensity and fast pace? Are you willing to accept steady growth and offer employees a more balanced personal and work life?
Keep in mind that increased sales don't necessarily mean more profits if you're poorly managing human resources. Many businesses eventually find an ideal size, where the right number of people is directly in line with their costs and sales. As you increase sales, you also have to improve the use of your human resources, for example, by finding ways to get the most of out your employees. HR growth is essential for a company but you have to be sure that it doesn't crush your business.
If you want to better prepare for the future, you could consider using a growth potential tool to evaluate the potential of your business. BDC's trained specialists can conduct a cost-effective diagnosis of your business that will provide you more insight into important factors such as human resources.
Define your skills requirements
Essentially, there are two basic areas that you should be addressing when planning your HR investment.
- Technical skills are the competencies, knowledge and educational requirements that you need to do your work. Ask yourself: do you build on your current staff or do you outsource the work?
- People skills are overlooked by many entrepreneurs, which are the essential behaviors needed to run your business. Are your people innovative or customer service driven? They may have the technical skills but not the soft-skills required to make your business a success.
An effective recruiter can help you articulate your requirements and target candidates with the appropriate profile. Since hiring demands substantial time and resources, you want to use a recruitment process that will reduce costly turnover and increase your chances of selecting and retaining the right people who will deliver the performance that your company needs.
Put training at the top of your priority list
Be that sure that you offer employees ample training and development. After all, closing gaps in skills with current employees is considerably less costly than hiring new employees or outsourcing.
Keep in mind that training is not limited to classrooms today. Web-based training and on-site training, for example, are an option. As an entrepreneur, you can also consider less costly training options, such as appointing mentors and coaches in your company to help people develop.
Determine cost
There's no doubt that full-time employees provide key advantages such as more loyalty and increase productivity. But be sure that your costs for salary, benefits and training are in line with your profits. Look at the short, medium and long-term capital gains for your company and the expenses and indirect costs of hiring people. You may quickly see that adding full-time staff isn't necessarily the first route to take. As an entrepreneur, you can consider other options such as:
- buying equipment or technology to improve customer service or other operational activities.
- outsourcing work; this is ideal for short-term project work or finding expertise fast but can be more expensive.
- using part-time employees; these employees can be trained when needed and involve less financial commitment. However, they may be more difficult to schedule.
- hiring students who are often enthusiastic and can work for lower rates based on their experience. Still, keep in mind that they may need more supervision.
Take action
Before you let people go, be sure that they don't have skills that can be reassigned elsewhere in your company. After all, rehiring is a costly investment. However, if employees don't deliver, it may be in the interest of your business to make that tough decision. As an entrepreneur, sometimes it's difficult to separate personal and business issues. It may help to maintain a focus on your business needs and remain open to all possible solutions, such as helping your employees find other work through outplacement services.
Benefit from specialized services
HR planning can involve complexities that demand outside expertise. You might consider getting assistance from human resources advisors, such as the BDC Consulting.
As well, small and medium-sized businesses can benefit from extensive help from key federal government departments, such as Human Resources and Skills Development Canada. The department offers the Services to Business Gateway, where you can find links on pertinent issues such as hiring, internship, employment insurance information, labour education and training, occupational health and safety, and much more.
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