The word ‘HR’ can be a daunting prospect to many SME’s (small and medium-sized enterprises), but not taking it seriously could potentially cause serious harm to your business. Building and maintaining a strong HR strategy is key to organising your business, motivating staff and retaining your talented workforce, ultimately taking your business to new heights.
In previous years, HR has been neglected in a lot of small businesses, not because entrepreneurs aren’t proactive when it comes to recruitment, but due to a lack of understanding and awareness of it’s impact on business growth. *90% of company founders come from a background in sales, finance or engineering, with next to no knowledge of the HR industry, so it’s a learning process for many.
To help you through the minefield of policies, legislation and procedures, we want to share our top HR ‘no-brainers’ for SME’s and start-ups.
Establish your framework
It’s vital for the business that your HR policies are set up and in place. Without a framework, you’re setting yourself up to fail! These policies should outline basic expectations of your employees, along with statutory requirements, such as:
- Performance management
- Employee evaluation
- Absenteeism
- Annual leave
- Sickness
- Anti-bullying/anti-discrimination/anti-harassment
Recruitment
Establish your aims and goals of the company before hiring. It’s important you have a solid understanding of the type of skills and experience you’re looking for in an employee to ultimately help you achieve your business objectives. This will form the ‘job description’ for your new employee position, which is crucial to the development of your vision.
Tip: If you’re a small business without a HR team, then you will need to get your standard employment contract sense checked by a solicitor before getting an employee to sign it. This ensures it’s compliant with employment law, and avoids any potential clauses in the contract.
Social Media
It’s a 21st century movement which has had a huge effect on the way businesses operate, so you need to make sure you’re protected against any problems caused by social media.
Make sure you’re clear in your HR policy documents about the expectations of employees and the use of social media within business hours. Your policy should make reference to this and outline the consequences of written abuse about your business online. If this leads to dismissal, you must make it clear in writing.
Statutory Rights
Statutory employee rights are constantly evolving, so you need to make sure you’re on top of this at all times, otherwise you could be in for a nasty fine, and a damaging employment tribunal. Employers also have the difficulty of ensuring that company policies do not disadvantage certain groups within the workplace – both directly and indirectly. This is something to bear in mind when you’re setting up a strategy. Again, it’s safer to have your policy documents sense checked by a solicitor, or if you’re a medium to large sized business, your HR manager.
For more information on statutory rights, please visit Citizen’s Advice.
Pension
Under the Pensions Act 2008, every business, regardless of size, must contribute a certain amount to their employee’s pension scheme, otherwise known as ‘automatic enrolment’. This can be set up by yourself or a specialist company for a fee. It’s good practice for you to provide a document of information about the scheme to your employee. This must be detailed in the contract of employment, to ensure that all employees are aware of what they’re entitled to.
Payroll
Many SME’s outsource their payroll to an accountant or bookkeeper. However some very small businesses will delegate this job to the director of the firm. Whomever it is, the person must have an in depth understanding of the PAYE tax system and the returns which must be made to HMRC. HR experts stress how important it is to keep on top of your finances. It is vital that your employees are paid correctly and on-time, with any required deductions given. Failure to do so can result in legal action against your business.
For more information on HR best practice and the fundamental of people management, please visit the CIPD website.
*Statistic taken from https://www.cleverism.com/hr-strategies-for-smes-and-startups/