It’s common for SME owners to outsource various aspects of their business functions – such as accountants to manage their finances and solicitors to manage legal work. Yet the area of HR – human resources – and people management are rarely treated as a priority, often only being considered when something goes wrong.
Today’s employment market is changing though. The mindset of the new generation of employees, their career expectations and their perceived sense of entitlement, is causing major issues for business owners. The nature of work is constantly changing and there is a growing demand for workplace flexibility. Although people form the biggest expenditure in any business, many business owners struggle to maximise that investment. HR is becoming more relevant and topical than ever before and it is critical businesses understand this.
Treating employees poorly can lead to major problems for employers. At the very least, poor management of staff can impact effectiveness and productivity, resulting in a loss of time and money to your business.
Whether business owners like it or not, the modern-day employee expects financial reward and promotion without years of dedicated service – there is a generational shift in attitudes towards entitlement which leaders must know how to manage. The Fair Work Commission (FWC) has a process by which for just $70.60 – employees can lodge an application against unfair treatment.
The risks to small-business owners ending up in the FWC are significant – financial loss, productivity and a negative reputation in the wider business or consumer community, as well as with their existing employees.
Organisations are slowly realising that a GM or business owner should consider focusing more on the people in a business – how they perform, whether they’re satisfied and fulfilled in the workplace – than on the pure numbers related to financial performance. It’s becoming accepted wisdom that more and more of the leaders of the future will have an HR background instead of a financial or operational one. Done well, HR can help attract and retain highly skilled employees who will ultimately help you grow and develop the business.
The HR Dept recommends that all small businesses establish some sort of HR provision, just like you would have an accountant, bookkeeper or legal foundations. That’s for three reasons. Firstly, so that you can make sure your staff stay motivated and productive. Secondly, so that you are protected against any risk of complaint. Thirdly, so that you can concentrate on running and potentially growing your business without the headache of HR (something that is most likely not part of your key skill set). Outsourcing your HR will save you time and money and have a positive impact on the overall success of the business.
It is also worth researching your obligations under Fair Work Australia and the relevant employment legislation, so that you at least understand the basics. However, as with all legislation this is a complex area and forever changing so we recommend bringing in support rather than trying to manage it on your own.
You need to be legally compliant and armed with the confidence to succeed, knowing that best practice HR processes and procedures are in place to prevent people problems before they occur.
Jenna Paulin, Director, The HR Dept