Traditional HR Under the Spotlight
HR has always been the underdog. A place where employees went to complain with a nice cup of tea and tissues on hand. Business owners have always been weary and only sought counsel if things went horribly wrong. HR swooped in, armed with legislative guidance, best practice notes and an employee handbook! They rarely brought anything commercial to the table.
Professionals have traditionally risen up the ranks from HR Administrator to Head of HR without any commercial experience. The UK’s HR governing body, CIPD offers professional roadmaps and competencies for a “commercial HR practitioner” but does not address the gap in the biggest competency needed to be a brilliant HR specialist - solid business acumen.
In an attempt to salvage the reputation of a function which worked almost in opposition to business, the HR Business Partner model was born. Essentially, the model works on the premise that HR should be aligned with business leaders influencing business strategy. It is primarily a model which works in corporate organisations where stakeholder management and political management is required.
Our argument is that all HR professionals should be commercial irrespective of their level or background.
Current trends in HR
In spite of the criticism, HR’s typically conservative approach has given way to pockets of innovation, particularly in small businesses:
Should any of Google’s U.S employees die, their surviving spouse or partner will receive 50% of the employee’s pay check each year for the next 10 years.
Atlassian, a software company based in Australia needed to hire a number of developers. Australia has a shortage of tech talent, so the team got into a bus printed with the slogan: “Europe, we are coming to steel your geeks!” They toured through Europe and created an online campaign which created a lot of awareness. The result - they hired 15 great developers in 15 days and built awareness about their workplace as a great place to work.
Outrageous recruiting video
Game creator Kixeye put together an outrageous recruiting video that poked direct fun at its competitors. The video mocked the age of EA’s approach to gaming by depicting an aging executive with an oxygen breathing tank. To most, this mocking would definitely be bad taste, but to candidates in the gaming industry, it’s considered cool and bold.
Bold employer branding
Amazon placed a letter containing information about it’s employee educational reimbursement benefits directly on its customer homepage. Although a letter about benefits might startle shoppers, it also sends a message to everyone who interacts with Amazon that employee welfare and development is important.
Unlimited vacation policies
A role of the HR department is to track absenteeism and vacation days. However, foursquare, Netflix, and several startups have begun to offer unlimited amounts of vacation and sick leave. This approach treats employees like mature adults who know how to manage how much time to spend away from work. By offering compelling work, tight knit teams, and performance-based pay, the firm offers enough positive incentives to drive employees to work more hours.
HR and a unique population
Take away the corporate behemoths, where does that leave small to medium businesses? What should great HR look like? How can it add value? More crucially, is it even required?
Entrepreneurial and technology businesses provide a unique HR challenge - extremely well educated and talented people in comparatively small businesses. People tend to be ambitious and want to see how they are being invested in for the future. They are less loyal than other more traditional firms and tend to be more flexible in terms of career development and growth.
Loyalty is often a challenge with a recent report citing that 76% of full-time workers, while not actively looking for a new job, would leave their current workplace if the right opportunity came along. Other studies show that each year, the average company loses anywhere from 20% to 50% of its employee base.
The pace is also dramatically faster than in other organisations.
The leadership team tend to be hands-on. If it’s a founder-led business, they manage the day-to-day running of the business and drive the culture as they see fit.
HR done well in a small business is an ally to the leadership team, supporting, coaching and advising. Some rapidly growing technology businesses with highly-skilled, in-demand professionals are taking advantage of the immediate HR returns outsourcing can offer.
Whilst every business is unique and one size does not fit all, here are some ways good HR can add value to a small business:
Helping to keep employee relations healthy - offering commercial advice to nip issues in the bud.
Designing and streamlining HR processes so time is spent on value-added activities.
Designing systems that work e.g. great performance reviews, effective HR technology and incentive schemes that suit small businesses.
Identifying skills and capability needed to grow the business in the future and developing these through blended learning approaches.
Gearing for growth by proactively building a network of suitable talent and supporting the business with retaining and developing star performers.
Actively managing talent by getting under the skin of employees - how engaged are they? What are the pain-points?
Supporting business change through well designed communication plans.
Help with attracting people to the business - creative campaigns, networking, meet up events.
Giving managers the support and tools they need to get the best out of people.
Help develop leadership capability.
Finding the right HR skills
HR professionals that do well typically have a make-up of four components.
1. HR Experience
Brings best practice processes and knows what HR excellence looks like bringing it to the business.
2. Business & Industry Knowledge
Acts as a partner to the business, can use their language and has a view on the right solutions for the team.
3. Cultural Fit
Fits seamlessly into the “vibe” of the culture, is authentic and becomes a trusted advisor.
Able to cope with change, pace and demands of an ambitious and growing business.
Things to think about
How could HR help your business?
What are the challenges your business faces?
What’s the value proposition you have with your people? Why did they join and why do they stay?
What’s at risk if you don’t continue to build loyalty and engagement in your teams?
There is no golden bullet in HR. Everyone approaches it differently and one size does not fit all. The strategy of your business plays a significant role in what you need from HR. Whether it’s growth, international expansion, downsizing, the shape of HR needs to reflect your plans.