It's a scene you could have never imagined happening at your firm: A star employee is accusing his coworker of harassment and is promising to sue. Now what? Frantically, you call your lawyer at 10 p.m. to help you sort things out.
"Unfortunately, this is when a small-business owner realizes the need for professional day-to-day human resources management. It's a proactive move toward mitigating risks of incidences like these" says Eric Semel, a New York-based HR consultant and former vice-president at Simon and Schuster.
People management is top-of-mind.
"If you think of HR as benefits management, hiring and firing, and planning the annual holiday party, think again," says Semel. "The post-pandemic workplace calls for more thoughtful and expansive human resource management strategies." The top concerns he cites are:
Developing diversity, equity, and inclusion initiatives. A recent Pew Research survey of American workers on DEI initiatives shows that 56 percent of employees feel DEI is "a good thing." While that's a healthy number, more education and awareness is needed.
Making the home/office culture work. In a 2022 Cisco survey of American employees, 73 percent said their companies need to rethink the hybrid office culture.
Ensuring a solid career path for younger employees. According to a 2022 Fortune report, 70% of Millennial and Gen Z employees said they were ready to leave their jobs due to a lack of skill-building assistance.
Learn the benefits of professional HR management.
"Comprehensive HR administration covers not only benefits, hiring and firing, but also delicate workplace issues calling for careful management and adherence to well-established best practices," says Semel. But despite these and other benefits of HR expertise, many small businesses are still "winging it." Are you one of them? If so, Semel points to these benefits of dedicated HR management as food for thought:
Get back to managing your vision. Are you running a growing firm and finding yourself onboarding new employees, researching benefits, or working with your payroll provider on mundane glitches? Your time is better spent on your big-picture vision.
Ensure you're staying in compliance. Every firm needs to follow federal, state, and local employment laws and regulations. Many industries also have their own codes and standards. The aforementioned advances in diversity and inclusion best practices are integral to this HR function.
Get serious about career development. Successful employees set goals, get feedback in regular evaluations on their progress, and receive training to expand their roles. Imagine the short- and long-term benefits a program that helps your employees grow, while ensuring they're treated fairly.
Develop a professional workplace culture. A positive office culture encourages employee retention, fosters harmony, and eases recruiting. Smart HR management can create that atmosphere by developing a diverse and inclusive pool of talent, while managing day-to-day conflicts and grievances.
Grow smartly. Do you want to expand sales 50% by 2026? Take your business 100% online? Then you'll need to bring in some top people that take time and energy to find. Hire the top guns to find those top performing salespeople, Web developers, and anyone else you need to realize your grand vision.
Three Ways to Bring in HR Expertise
Ready to move on a dedicated HR solution? Consider these options:
Recruit an In-house HR manager. A full-time, embedded HR manager is the most comprehensive commitment you can make to improving your HR best practices; A manager with five years' experience commanded a $126,230 annual salary in 2021, or $60 per hour, according to the Bureau of Labor Statistics. "There'll always be someone at the ready to address crises large and small," says Semel.
Use an HR software platform. Almost two-thirds of small businesses use some form of HR management software, with another 15% evaluating this move. According to Tech Target, SMBs can expect to pay about $5,000 a year for a platform for a few dozen employees, though this number can vary widely based on services and modules chosen. Payroll services providers such as Paychex and ADP offer comprehensive software-based services.
Hire a consultant on an as-needed basis. "If you have a one-time project such as an employee survey that you want precisely worded or you're drafting an employee handbook, hiring a consultant can be a great, targeted approach." Says Semel. You could also use a consultant to "overhaul your existing recruiting, onboarding and training procedures, then stay on board to implement the changes."
Consulting costs vary, depending upon level of expertise and location. But in general, expect to pay anywhere from $200 to $500 per hour for a seasoned professional, with the average being closer to $300 per hour.
"There's no single ‘right way' to tackle comprehensive HR management," says Semel. "But you can start by determining your budget. Then talk to HR service providers, consultants, and a headhunter with specific expertise in HR hires," he adds. "By doing so, you'll be on your way to locking down a comprehensive HR plan."
By the Numbers: Workplace Issues Ripe for Active HR Management
A May 2023 Pew Research Center survey of the American workplace revealed that:
51 percent of employees are happy with their job;
44 percent feel they have sufficient opportunity to expand their job skills;
33 percent think their workplaces offer enough opportunities for promotion.
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