Small Businesses Have Big HR Needs - National Post

Where there are employees – be it 14,800 people, 710 people or 43 people – there are HR issues. Most mid to large sized organizations have a Human Resources Department with a number of HR professionals typically covering off most HR functions. Conversely, most small businesses do not have an HR professional at all.  Some do opt to have a junior generalist who fulfills some HR functions such as payroll and recruitment. But what about all of the other HR functions?  Big HR needs do exist in small companies, but what is the best approach to addressing them?

HR functions such as designing performance management systems, developing talent management strategies, creating compensation plans and preparing for terminations are best handled by senior HR practitioners. But there are few seasoned HR professionals want to work in small businesses where they would be the only HR resource and therefore would need to do the highly administrative and more tedious aspects of HR. As well, companies who have 100 employees or less would not be able to keep a truly senior HR professional busy and challenged 5 days a week, let alone be able to afford them. 

The director of a private clinic expressed his frustration due to the absence of an HR professional, “it’s crazy, I’m not a big corporation, but I have human resource needs too but I can’t afford to have an HR person on my staff”. So how do small businesses best deal with big HR issues if they don’t have a senior HR exec? By partnering with external Human Resources Consultants. 

The rationale for this model is that it costs much less for the small business owner and it is the best way to get senior HR expertise on an ‘as needed basis’. This model isn’t groundbreaking. In fact, many small companies adopt this same practice with their finance, marketing and IT needs. The more revolutionary aspect of this model is that an increasing number of small companies are realizing that human resources needs are crucial to success and cannot be overlooked. 

In one particular case, the client bragged that despite the fact that his company is so small, it has a policy manual and employee benefits. This is great except for the fact that when it came to recruitment, he had no idea that there were prohibitive grounds under the Human Rights Code. That is, he didn’t realize it was illegal to ask about people’s age, marital status etc.   Small businesses can’t afford to make mistakes when it comes to things like employment standards and laws. Throw in the need for hiring the right talent, motivating them and ensuring they perform in their roles and it’s easy to see how an HR consultant can add a lot of value. 

When filling this HR need, small businesses should look for someone who best suits their organization’s culture and values. Performance reviews, recruitment strategies, the way terminations are handled – these are all processes that require careful representation of the organization. Searching for the right HR consultant should involve thorough reference checks to learn how the consultant conducted themselves, whether they represented the company appropriately and of course to determine whether they had the desired impact. Speaking with other small businesses in your network is a great way to find out who is out there in terms of HR consultants and how they’ve met and hopefully exceeded the needs of a company your size. 

Recruitment for Small Businesses - National Post

Small business operators may not have the luxury of on-staff Human Resources professionals or budgets for external recruiters that most larger size organizations have. The recruitment process can be overwhelming and cumbersome. It can be less so if a lot of thought and effort goes into the front end of the process. Some of the most critical parts of the hiring process occur long before the face-to-face interviews begin. The more thought you put into the pre-interview portion of recruitment, the more likely it is that you will find exceptional candidates. 

PUTTING IT OUT THERE - Start thinking about who you want to hire when you’re writing the posting. Dusting off an old posting and tossing it on some job boards is the approach of least resistance but it will not yield quality candidates. Take time to write a posting that will let candidates know what you’re looking for. Outline the responsibilities in a way that represents the role clearly and accurately. Include required technical skills, work experience and education as well as personality traits. Speak to internal stakeholders about what qualities they think candidates should possess in order to be successful in the role. Put your marketing hat on - describe ‘what’s in it for the candidate’ - you’re selling the role as much as candidates are selling themselves. 

Research the ideal places to post your role. There are a lot of less well known websites and e-newsletters where postings are cost effective and read by people in specific industries. When you post on an online careers site, you’re only getting the people who are actively looking for work. When you post in an industry magazine or site you’re getting people who are reading the editorial to keep up to date on their field and who may glance at the careers section and apply if something peaks their interest. 

Since many small businesses’ names are not widely known, it’s important to provide a description of what your company does. Feel free to mention the location of the office, especially if it’s on the subway line or in a highly desirable area. Include any other pertinent information such as awards the company has won or positive mentions of the company in the press.  

FIRST GLANCE - Set aside some time over a few days to review resumes that come in. It’s not something you want to do in one sitting, especially if you receive a large number of applications. Organize the applications into categories such as ‘not interviewing’, ‘maybe interviewing’ and ‘interviewing’. Prepare a form with a series of phone screening questions that you’re going to ask each ‘interview worthy’ candidate. Face-to-face interviews should be reserved for those candidates who respond to the phone screening questions successfully. This makes sense because you don’t want to waste time interviewing someone who wants to earn $20,000 more than the role pays - this could have been revealed in the phone screening phase. 

ONE CHANCE - Small businesses often don’t have the brand strength that large organizations may have. Be sure to use the phone screening as an opportunity to make a favourable first impression on the candidates. Keep phone screening to twenty or thirty minutes. That’s enough time to make a choice about next steps. Let candidates know what your recruitment process involves and if they are to hear about a next step, give them an idea of when they can expect to hear from you. Let star candidates know that if they are interviewing for other roles and getting close to accepting an offer they should feel free to let you know and you may be able to expedite your process. Let them know when they’ll have an opportunity to ask questions they may have - it’s appropriate to save that for the face-to-face interviews. 

Put thought into the front-end of the recruitment process and your small business is sure to have a large number of qualified and interested candidates. 

Recruiting C Level Candidates to Small Businesses - National Post

In a small business you need to be especially sure that you have the right team in place.Naturally this is true of any business, but particularly in a small organization with limited resources and such a unique working environment that fit is paramount. A lot of thought, planning, marketing and strategy should go into any productive hire - especially for a senior role at a small firm. 

The cost of mis-hiring at the executive level can be huge. In the case of small businesses where there is often not an abundance of disposable funds it is vital to know how to attract and hire the right senior team members. This can be done through your network and sometimes through posting positions on recruitment or industry related sites. That said, there are certain roles that are so integral to the functioning of your small business, that you may need to expand your search by accessing talented c-level candidates who are not actively searching for a role. The best way to do this is with the help of executive search professionals. 

I spoke with Gillian Tessis, Executive Search Consultant with The Bedford Consulting Group who has worked with small businesses and start ups to ensure that they hire the right talent for their senior teams. She says that to attract a candidate from a larger organization, the candidate will truly need to believe in the vision of the President/CEO. Tessis feels that there is generally more perceived risk joining a smaller or start up firm than a more established company. Naturally, the right candidate for a small business will have an entrepreneurial spirit and will be attracted to what is unique about a growing firm. Tessis feels that candidates will be more likely to make a career move if presented with inspirational leadership and a compelling story. 

In terms of executive compensation, Tessis is clear that when it comes to a senior level executive joining a start up, they tend to expect an equity stake in the organization (ie stock options or phantom stock). This is in addition to a cash compensation package that may have to be richer in order to compensate for the risk associated with joining a smaller organization or a start up firm. 

It is not unlikely that small organizations will be interested in the experience of an executive from a larger organization when it comes to filling some of their senior roles. Small organizations may be impressed by the experience of someone who has been a key player for a Fortune 500. However, the person conducting interviews on behalf of the small firm needs to effectively screen for organizational fit. Tessis agrees that a new hire from a large organization may not be able to adjust to the new reality of limited resources and nimble decision making. According to Tessis, small organizations need to screen these candidates for some evidence of being able to succeed in a leaner, faster paced, entrepreneurial environment.

Tessis stresses that in today's economy there is a critical shortage of qualified candidates for an increasing pool of leadership roles. Small businesses retain her firm’s services when they are serious about attracting top talent for their mission critical

leadership assignments and can't afford to make a mistake. 

Communicating Well in Small Businesses - National Post

Don’t underestimate the power of not communicating. In the absence of you clearly communicating what is on your mind, other people will make up their own minds about what you’re thinking. While conducting some workplace satisfaction interviews for a new client, I learned that some of the employees feel that the company’s proprietor is a snob who rudely avoids them. I probed to find out more about the circumstances under which these individuals felt ignored. It turns out that when they ask him about a salary increase he doesn’t follow up with them. This is not an approach that I condone. However, it is an approach that I understand. Because the organization has no set time of the year for performance and salary reviews, this business owner can be a target of these requests on any given day. Who wants to be asked for money every day? Therefore, he has created a coping mechanism, albeit not a great one, which is to avoid these salary increase seeking employees.  You know what they say, ignoring your problems doesn’t make them go away. In this case, avoidance caused his employees to feel uncomfortable and to create an impression of him that was not accurate at all. The proper way to prevent these random requests and how to avoid the perception that you as head of the organization ignore your employees, is to establish a set time of the year for an annual performance and salary review. 

Due consideration. Part of communicating effectively is hearing what other people have to say and giving it due consideration. In one case, an employee at a boutique sized marketing firm has felt for a long time that the hours she works are excessive - and she’s right. She has brought this to the attention of management who kept promising her that it was temporary.  After a few months, this employee’s long hours haven’t changed and saying that  it is ‘temporary’ at this point is clearly not true and is in fact dismissive. In this case, this is particularly troubling as the person who is distressed about her long work hours is regarded as a high performing employee. Communication, especially when it comes to the management of key employees, is not just about saying something, it’s about giving thoughtful consideration and a well thought through response. In this case, the employee confided in me that she feels undervalued. Clearly the manager’s lack of communication has led the employee to create her own idea of what’s on her manager’s mind. 

Both ways. Don’t wait until you’re faced with a complaint or a resignation to realize that an employee has something he wants to say. One agency I work with has recently decided to have one-on-one interviews with each employee, they feel it’s worth the time and cost to learn what is on their employees’ minds. A less expensive option is a self administered employee satisfaction survey. They are a good practice, providing the leadership of the organization can respond to the needs revealed in the survey. It’s better not to ask in the first place then it is to ask for their opinion and then do nothing at all.

Communicating optimally for the business. In a small business, where everyone is in close proximity to how the business runs as a whole, it’s important to encourage employee input on certain business decisions.  This is not something that needs to be done via e-mail just because people have PDA’s they can access 24/7. People need to talk to each other, face to face. It’s a great practice to have a casual weekly or bi-weekly meeting where each person can talk about what they’re working on as well as what support they may require. This round table weekly update is used really successfully by one of my clients and it only takes fifteen minutes of everyone’s time. The president of the company feels that having these weekly meetings has alleviated the issue of having employees come to her door randomly and ask her questions that their colleague likely knows the answer to. In fact, she challenges everyone to ask two colleagues their question before they come to her - it’s not that she’s unapproachable, it’s just that it’s more optimal for them to ask a colleague then it is to interrupt her. She welcomes any and all questions at the weekly updates and has found that her employees have fabulous ideas to share regarding how to grow her small business. 

Optimal communication in small businesses is best when it’s cooperative, low tech and well thought through. 

December Holidays - National Post

It’s December and almost everyone is thinking about the holidays. With all of the chatting about family holiday plans, which greeting cards to send to clients, what basket has come from suppliers and the work holiday party, it’s hard to think that any work is getting done. There are definitely ways to keep your employees focussed during the holiday season. 

Incentivize

December is not the time to come down hard on your staff for being distracted. While you don’t want to have an entirely unproductive month, there are ways to harness some productivity while promoting holiday joy. A great way of doing this is to set specific objectives and reward their achievement. In a small business, you have the luxury of being creative. So why not give a special reward such as a $250 gift card to the employee that meets a certain work goal. Another way to motivate the team is to create some goals and if your employees reach them, you can close the office a little early one weekday so they can do some holiday shopping without battling the weekend crowds. 

Sensitivity

The holiday season can be distracting for some in a very emotional and/or negative way.  Thus, there are some people who will not want to be included in any holiday related discussions, never mind the celebrations. As a small business operator, it is your responsibility to be sensitive to those who may not celebrate for religious reasons or who find the time of year difficult due to personal issues such as illness or loss of a loved one over the past year. You don’t need to specifically approach these people, but you also don’t want to ask them to be the ones to organize the gift exchange or put up the office decorations. If you are in a situation where you feel the need to discuss their mood, particularly if it’s affecting the quality of their work, you can refer them to use their  Employee Assistance Plan and if they don’t have one, you can refer them to their family doctor who often has many resources for coping with stress and depression. 

Celebration

While this article is about keeping the team focussed at holiday time, sometimes the best way to do this is to have a scheduled holiday event. This makes it clear that the company is recognizing the holiday season, but for a specific amount of time and that at other times, the expectation is that the holiday chatter is secondary to getting the job done. 

Vacation

It’s important to decide ahead of time whether you are going to close between Christmas and New Years. This gives employees a chance to plan their vacations ahead of time. As well you need to decide beforehand whether these will be part of the vacation days the employees receive or will it be extra days on top of those predetermined vacation days. The more advanced time you give them to plan their holiday time off by letting them know what the company holiday schedule is, the less likely this will consume their time and thoughts during December. 

Overall, the goal should be to incorporate the spirit of the holidays into your small organization without taking all eyes off of the business of doing business. 

Managing Performance in Small Businesses - National Post

Any company whose fiscal year begins in January should already be thinking about their performance objectives for January. There are plenty of different ways to go about structuring organizational performance management. But for small businesses I most often suggest using a model which turns overall, company goals into specific and measurable ones for each and every employee. It’s not that this approach isn’t suitable for large organizations, it’s just that it’s much easier to institute on a smaller scale. 

In this cascading performance objectives model, the organization’s leader creates a set of goals that cover off all of the company’s goals, needs and targets for the upcoming year. It is best to separate these into sections such as: Profitability, Best Practices, Innovation, Market Share, Client Satisfaction and Employee Satisfaction.

The next step is for the leader to share these objectives with his or her direct reports. They in turn will review them and create their own goals to pursue in order to help meet those of the overall organization. These objectives need to be ones which are quantifiable, achievable and help to propel the company forward. For example, a goal such as “keep market share at 10%” is not as propelling as “increase market share to 12%”. Of course, these need to be time bound and, as such a reasonable due date needs to be specified for each objective. 

Once the leader and the direct report agree on these objectives they should be shared with the next layer of employees. This way, they create individual performance goals which directly enable their director achieve theirs. This method of cascading objectives is really a ‘no goal left behind’ approach. The leadership can’t possibly accomplish everything on their own and this way each individual owns pieces of the corporate objectives and is responsible for their attainment. 

This sounds like a lot of work but any effective performance management system is going to be labour intensive at the front end. Much of the art of making cascading objectives work is in getting internal buy-in. The way to do this is to explain the process in its entirety before overwhelming people with their personal homework of co-creating their objectives with their manager. It’s all about the kick-off and it’s all about tying it to a reward – monetary or otherwise. Companies who have historically given out rewards without having them based on achievement will have their work cut out for them. That said, it’s the organization’s prerogative to say “from now on we’re going to be doing this differently – everyone will benefit because we’re going to drive our performance together – the company’s success and your individual success are intertwined”. One non profit client of mine was won over to use this method of selling a new performance management model when I told him that not-for-profit need not equal not-for-performance! 

In order for this approach to be successful, employees and managers need to communicate throughout the year because goals will not likely be reached if they are only mentioned pre-fiscal and at the very end of the year. All objectives are organic and may change depending on a number of circumstances. Employees who are interested in attaining rewards and bonuses should keep a hard copy of their objectives on their desk. This way, they can track their achievement and alert their manager to amend any goals which may need to change over the course of the year. Similarly, managers who want to help steer company performance need to have monthly review meetings to ensure that goals are being met.  So as this year nears its end, it’s time to start planning for a successful New Year!