Have you ever stopped to think about what Human Resources actually covers and why all large businesses have a department dedicated to the management of their people? For many micro and small businesses, the thought of Human Resources (HR) is, well…. Not really a thought at all. There are only 4 key elements that a first-time employer MUST do to enable them to take on their first employees legally:
- Contract of Employment
- Employers Liability Insurance
Even with this limited list, believe me when I tell you that we still come across businesses who employ staff with only the payroll element in place!
For me, HR can be distilled into three major components:
This is by far an over simplified model, but in essence, even without a clue about HR, this is what all business owners do when they become employers. I am not going into any detail here, but suffice to say, the list which follows is meant to prompt thoughts and questions:
- Are we doing this?
- Should we be doing this?
- Could we be doing this better?
Also known as resourcing or recruitment, this element includes both internal and external appointment of staff. It is about having the right people in the right role at the right time. Hiring includes:
Face to face interviews
Also known as ‘Managing’. By far the biggest element and that traditionally thought of as HR, this includes Employee Relations, Development and Reward. This is where many of the policies, procedures and processes associated with people management belong. From annual leave to maternity, from pay and commission to first aid training and management development.
The culture you create in a business is vital and it is really important to identify your core values, those things which differentiate you from your competitors. You can then hire, inspire and fire based on your values and culture. You write your policies and procedures with your core values and culture at their heart. Examples of policies based on values and culture may include your code of conduct, dress code, sick pay and annual leave policies.
To give this its correct name – termination.
There are only 4 legitimate reasons to terminate an employee:
- Poor performance / capability
- Some other substantial reason i.e. they no longer have a valid work permit
With all of these reasons, a fair process must be followed, even in the case of gross misconduct and summary dismissal. This is where many employers get caught out and end up in a mess as they give the employee a legitimate claim against the business.
If in doubt, ask!
Many people assume that HR is just common sense, and to a large extent it is. However, there is also this thing called employment legislation and when this is combined with case law and ‘guidelines’, HR becomes a bit of a mine field. While your intention as an employer may be spot on, it is also essential that your execution is as well. If in doubt, ask! Getting the right advice at an early stage and ensuring you follow it, is essential for the long term survival and security of your business.