As businesses grow, so does the need to have structured and well managed HR systems in place. Whilst it may seem tempting to cut some corners and wait until problems occur before implementing things such as conflict resolutions procedures, or internal conduct policies. Without getting these things right and implemented early on, businesses will always continue to be on the back foot, and consistently chasing their tails!
We take a look at what HR is, why it is so important to all businesses, regardless of size and how sound HR policies, procedures and effective management can help your business.
What is HR?
HR refers to human resources, essentially the management of the people within your business. These may be staff, they may be contractors, or it may be simply managing yourself. HR processes or HR policies are designed to assist and support this process of managing people, with effective HR policies generally equating to effective HR management. They can be internally handles or externally handled by third party organisations, such as Dreamstone HR.
Why is having dedicated HR important to businesses?
HR processes are an essential and important part of any business, particularly as there are many obligations and requirements that business owners must comply with. Many of these compliance obligations are relevant, whether the business is a sole trader or a multi-million-dollar company with many employees.
When operating as a sole trader, you are essentially just managing yourself, so therefore, not needing extensive policies and procedures, or conflict resolution strategies. However, once your business grows and you begin employing others, as well as yourself, you will need to ensure your business is following the law in relation to your human resources and complying with all requirements and responsibilities that are associated with having employees. This includes OH&S obligations.
In the event that you are not fulfilling your obligations, most probably as a result of ineffective or non-existent HR, you could find your business facing expensive litigation from disgruntled employees or fines from government organisations such as SafeWork if something goes wrong, such as an employee or customer being injured in your business.
What sorts of things does HR cover and include for a business?
HR is so much more than just basic polices and procedures, and covers many elements of a business including safety, training, health and well-being of employees, conflict resolution, dealing with customer and internal complaints, conducting fair workplace investigations, and ensuring the business complies with all the relevant legislation from OH&S to anti-discrimination.
HR processes should include how staff are employed, how new positions in the business are created and filled, the conditions of employment including things like salaries, hours, expectations of employee behaviour, and what happens if employees do not meet those expectations, emergency procedures, and ensuring staff members have the relevant training for their positions. Businesses need to provide anti-bullying processes and to ensure that no staff member is bullied in the workplace. Small to medium businesses with between 1 and 100 employees need these processes in place just as much as larger companies do.
When someone leaves a small business, it can be very costly to replace that staff member, not only with the interview processes but providing all the relevant training for the new staff member. Superior quality and well managed HR processes will reduce the instances of staff leaving and will ensure that the changeover is as seamless as possible.
Managing your human resources is not only about reducing costs or meeting legal obligations of the business but is also about providing safe and healthy work environments and practices for all employees. Good HR policies and processes save your business money and help to retain healthy, happy staff who know your business and want to work productively and effectively for you.
How Can My Business Cover its HR Obligations?
There are several ways a small to medium business can create the HR policies, from the owner spending nights away from their families researching all the legal and moral obligations of being an employer and then writing the individual processes and policies to support the human resources of the business, to hiring a contractor to write the processes or employing a HR management firm who can help your business to create and implement the policies, procedures, processes and systems to ensure your business can easily manage all the HR requirements.
Employing external experts in the industry can be cost effective and can save much personal time and hard work. You can also have assurance that the experts will know the legal obligations of employers and will ensure your business meets the myriad of requirements.
Cost vs benefit – As a business owner, am I really getting value here?
While there will be a cost to the business in establishing and training your employees in the HR policies, procedures, and systems, this is minimal compared to the costs to your business of not having proper HR processes. SafeWork fines if someone is injured at the workplace can be up to $1,000,000 for the business, with personal fines to the employer of up $250,000 as well. If it is discovered that your business does not have all the appropriate and regulatory processes in place or uses sub-standard policies or systems, your business and you as the owner could face multiple fines or litigation.
HR processes also save your business money by increasing productivity, increasing staff morale, reducing absenteeism and the associated costs, and reducing staff turnover and the myriad of associated costs in replacing and retraining staff. Spending relatively amounts on getting the HR of your business right in the first place can make your business more competitive and can also enhance your business’ reputation. Conversely, getting HR wrong for your business can be extremely costly in money, time, and the reputation or good name of your business.
HR is extremely important for any business, whether large or small, and is an essential and regulated component of running a business. With many business owners pressed for time, and focusing on the operational aspects of their businesses, more and more business owners are turning to external HR management professionals to assist. That’s where the team at Dreamstone HR comes in!
With over 45 years of combined industry experience the Dreamstone HR team can assist in everything HR. Whether that be creating policies and procedures, ensuring compliance with relevant industry standards, or assisting with training and sourcing the right staff, the Dreamstone HR team are your one stop shop when it comes to HR.
With the ability to be part of your team, fitting seamlessly into your operations, your employees need never know that we are an external company, and with the ability to assist both large and small businesses, the smart choice really is to chat with us.
If you need HR assistance, and want to know more about how we can help your business reach its full potential, contact us today on (02) 8320 9320 or firstname.lastname@example.org.