How to run your HR department like a best practice SME

As the owner of a growing business, you’re no doubt an expert juggler. But, as your business grows, you can’t do it all. Eventually, balls get dropped and you need to take a different approach to ensure your business continues to thrive. HR is one such area that often gets pushed to the end of the priority list, until something goes wrong and you’re forced to take action.

Vikki Southey, Principal of Lucamie, works with growing small businesses, and says, “There are a number of clear signs that it’s time to take a more proactive and professional approach to HR:

1. Any kind of legal or compliance issue. I often have clients come to me in a panic when they find themselves battling a disgruntled former employee at Fair Work, and they realise they’ve exposed themselves to a huge raft of compliance risks.
2. Underperforming staff. When a business is really small, the business owner has plenty of time to ensure their staff are happy and performing well. But, as the business grows and the pressure of bringing in money to pay additional staff increases, that focus on staff naturally diminishes and with it so too does the workplace culture and general performance.
3. Administrative disorder – outdated position descriptions and contracts, for example, or losing track of annual and sick leave. Usually, it’s that leap from 2 – 3 staff to 10 staff that causes the most issues. At that point, a business owner really needs to start thinking about putting some systems and tools in place to manage HR more effectively.”

So, if you’re experiencing these growing pains and want to start running your HR department like a best practice SME, what should you focus on?

1. Automation

The number one function that differentiates ad hoc small business HR from a more professional, streamlined SME approach, is automation. Look for an online system that provides industry-specific, automatically-updated documents, streamlined processes and workflows with in-built notifications, and the ability for employees to self-service. Moving to a paperless, in-the-cloud environment gives you much greater control over your important employee data and records, and will provide huge time savings – no more battling with clunky Excel spreadsheets or searching through outdated filing systems for important documents!

2. Compliance

A comprehensive automated, online system (per point 1) should go a long way to taking care of compliance. Make sure that whatever system you choose provides documents, contracts, and processes that are regularly updated by legal experts, per industry changes and regulations. Then it’s a case of regularly performance managing your staff so that they’re following your compliance procedures, and ensuring your managers are fulfilling their obligations too. Again, a good automated system will give you the management framework, tools, and reminders to make this simple (and ensure it actually happens!).

3. Employee satisfaction

With an automated system in place and compliance under control, you’ll have more free time to focus on creating a positive and proactive workplace culture. Despite the busy day-to-day running of your business, it’s important to prioritise your team’s professional development and personal fulfillment, so that you can attract and retain the best staff to keep your business growing.

Vikki Southey concluded by saying, “When a business expands from small to SME, it makes sense that HR must follow suit. Thankfully, there are some great, affordable online HR solutions that make this process simple and easy. With the basics of HR administration and compliance under control, business owners can then leverage the power of HR as a strategic business function, setting themselves up for the next phase of business growth.”

DiffuzeHR is transforming the way SMEs approach HR by giving them access to an easy-to-use, cloud-based system (and the smarts) to systemize and simplify, ramp professionalism, and gain proactive control. DiffuzeHR helps SMEs by allowing them to minimise risks, reduce legal fees, decrease time spent on admin, attract and retain staff, and leverage best-practice, industry-specific HR and legal expertise in a way that is simple, easy, and efficient.

To learn more about how to run your HR department like a best practice SME with DiffuzeHR, please book a demo at https://diffuzehr.com.au/.

Barry Lehrer

Having run my own small business for over twenty years, I understand one of the biggest challenges is protecting your business from potentially damaging personnel or HR issues. That’s why I developed Diffuze.