Who needs HR?

Take a look at most small or medium sized businesses and Human Resources (or as it is now more commonly known ‘People and Culture’) is typically not a formally identified part of the business and hence has no champion for it; yet it turns out to be one of the most important. At first sight, this may seem like an exaggeration, particularly since it is not something that is typically required five days a week in a business, but this crucial function covers many key areas:

· Duty of care for staff

· Recruitment

· Induction

· Performance management

· Compensation and benefits

· Staff training

· People-related policies and procedures

Let’s look at these in a bit more detail.

‘Duty of care’ is a broad term which covers the health and wellbeing of company employees. It necessarily includes Occupational Health & Safety (OH&S) which exists to protect staff from environmental risks and potentially negligent practices. However, it is also a broad umbrella which includes ensuring that the workplace is a safe environment allowing for psychological health as well.

In the absence of HR personnel, the recruitment and induction functions are typically performed by existing managers or senior staff. Since this activity is not core to what they do, this means they tend to be undertaken in the margins by people with little or no training in these areas. I personally believe that “hiring the right staff is the most important decision a business can make” so doing this in the margins is unlikely to lead to the best outcomes.

Performance management and compensation and benefits should be connected if staff are to receive the reward and recognition they deserve. However, done properly, this does require an investment of time since defining systems, processes, and procedures in place to ensure adequate frequency and fairness is a key piece of the staff engagement puzzle in order that employees feel valued. Staff training fits in here as well since a proper review of a person’s performance may well identify areas of growth and personal development that benefit both the employee and the business. Once again, if this area does not have a defined leader within the business, it tends to be a lower priority and usually done at infrequent intervals. Considering that ‘doing something worthwhile’ is typically the number one reason staff stay with a business, giving this area scant attention can end up being costly.

People-related policies procedures may seem like an overhead until the company ends up in court facing charges of unfair dismissal, bullying or harassment. If a company does not have adequately defined policies, processes and procedures for such areas, it leaves itself exposed to potential costs not to mention time wasted in defending itself. Here, prevention is far better than cure.

So, who needs HR? In short, every business needs it. However, this does not mean that every business needs to hire additional staff to support it. The function may be outsourced to companies that specialise in this area or existing staff can be trained up to fulfil the function as and when required. Irrespective of whichever option is chosen, recognising the need for People & Culture is the first step.

Ian Ash ACC
AInstIB Managing Director
OrgMent Business Solutions - www.ombs.com.au