Human Resource (HR)

 
 
 

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Human Resources (HR)

Just because most small businesses do not have or cannot afford to have a dedicated Human Resources (HR) department or person does not mean that the business does not require a HR function. All businesses are fundamentally made up of system processes (conversion of inputs into outputs that customers want to buy), labour (to do the system processes) and capital (monies to pay for inputs and equipment), with the only difference between a small business and a big one being the number of zeros after the dollar sign.

 
     
 

Owner at the Centre

The small business owner is often the key person and technician doing whatever it is that the business does to provide a product or service that customers want to buy. In some instances the small business grows to a medium business, because the owner employs a business manager to attend to the running of the business while the owner continues to be a technician.

An example of this would be a medical professional starting with one clinic and then expanding to several clinics on each side of town. A General Manager is employed to help run the business while the medical professional continues to be a highly specialised technician.

More often than not, however, the small business may grow to the point that the owner cannot produce enough product or service on his or her own to allow further growth. The owner, in this case, needs to systemise the business and add more people to work with those systems.

An example of this is a bakery where the owner baker cannot produce enough bread cakes and pastries on his or her own anymore. They thus need to hire more bakers.

 
     
 
 
     
 

More with Less

Hiring more staff, however, is not enough. If the new workers are left to their own devices, the resulting product or service may not match or meet established expectations of the business. This can cause loss of customer satisfaction, business credibility (another term commonly used is goodwill), and eventually the decline of the business as opposed to the owner's growth ambitions.

This is where the concept of Quality Assurance comes in. The basic concept is to write clear policies, processes, work instructions and guidelines that employees can read and reasonably reproduce, maintain and grow business outputs in conjunction with appropriate training.

These written works are compiled into technical or operational manuals that managers and employees agree upon as to how work is to be done within the business. They also set expectations on the quality and quantity of products and services produced by the business that customers want to buy.

     
 
 
     
 

Correct Documentation

If technical or operational manuals help manage the system processes, then HR recruitment, training, retention, discipline and dismissal is needed to help manage the staff labour. Only a one person business where the owner does everything is immune from having to tackle HR. If bringing on new staff or letting others leave becomes an ongoing requirement, it certainly helps to prepare and keep on hand prepared templates to save reinventing the wheel every time.

  • Recruitment notice

  • Job role and description

  • Interview questionnaire

  • Letter of offer

  • Parent consent form (for junior employees)

  • Orientation and training checklist

  • Customer feedback and complaint register

  • Performance, Development and Review agreement

  • Disciplinary policy and procedure

  • Dismissal checklist

  • Fire, First Aid, Security, Workplace Health Safety wardens and procedures

  • Emergency contacts
Preparing basic HR documents in advance helps protect the business from grievances and sets clear standards of conduct and expectations for the business and staff. It also contributes towards workplace culture, nurtures high performers, and improves flexibility to scale up or down the workforce as business conditions require.

Record keeping obligations can vary between different government jurisdictions, though a widely accepted retention period is seven years. Paper records will deteriorate with age, become bulky and time consuming to search, so the business should consider scanning, storing and backing up electronic copies with a convenient PC search function.