Promoted by Qantas.
People generally go into business because they have a skill or product they are passionate about, but all too often find that, as the business grows, managing people takes their time away from that passion.
Why is HR important for SMEs? Isn’t that a corporate function?
People management is actually most pronounced within small and medium-sized businesses, given that they collectively employ the vast majority of Australian workers.
Figures from the Australian Bureau of Statistics from May 2017 show that 4.7 million Australians are employed by a small business, accounting for 44.3 per cent of the total workforce. Mid-sized firms account for a further 23.3 per cent.
However, despite collectively being the biggest employers, SMEs obviously have tight resources, making recruitment and HR matters much more difficult.
Add to that the lack of managers and senior personnel to oversee everyday operations, and the burden only increases.
Common difficulties troubling business owners
Often it is only when problems become apparent that business owners realise that troubles are present. However, knowing the struggles that can impact on a business,and how those demands change over time, can allow owners to be more prepared in advance.
Some of the more common HR issues that SMEs face are:
Changing needs as the business grows
As every business owner knows only too well, things don’t stand still: needs change as the business grows and develops over time. However, it can be difficult for leaders to recognise these needs until cracks in the system become painful gaps.
HR is one of the primary examples where this occurs. Growing staff numbers require an increasing amount of oversight, and the complexities become more intricate as the workforce grows in size:
Initially, business owners may be able to manage these themselves, but as the business transitions from start-up to small business to a medium-sized enterprise, time constraints become ever more pronounced.
When this happens, the owner of the business must determine whether to create specialist roles in-house (such as HR managers, IT officers, finance and administrative support, legal and facilities managers) or outsource these functions externally.
Recouping time to work on the business, not in it
No matter which way business leaders choose to go, the delegation of non-core functions such as HR to others can free up a great deal of time and effort, and let them get back to what they do best: growing their business.
That means more time for making strategic plans, fostering high-value customer relationships and steering the business forward.
Thankfully, modern businesses have more choice than ever before on how to free up this time. Consider the following options, each with their own pros and cons to weigh:
Janet’s online clothing firm has enjoyed spectacular growth since she it launched five years ago. The business has quickly taken on more employees to meet this growth, with a workforce now at 50 people.
However, while the company’s orders are booming and client retention is very strong, its HR functions are heavily strained. The rapid pace of growth created significant challenges for Janet, particularly in regards to hiring new people, retaining the quality staff she already has and ensuring she is fully compliant with all HR legislation.
Recognising her need for some HR expertise, Janet weighed up whether to hire a dedicated HR manager or outsource her HR functions. She determined it would be better for her business to keep paid employees in customer-fronting roles, and outsource the other functions.
As a Qantas Business Rewards member, Janet decided to engage HR Advance, a Qantas Business Rewards partner, so that the money she was investing in her HR processes would also return rewards, with Qantas Points enabling her to upgrade her flights when travelling interstate.
While working with HR Advance, Janet discovered opportunities to improve productivity from her existing workforce by upgrading the business’ technology. Given how well the situation was working with HR Advance, she looked no further than Qantas Business Rewards partners Samsung and Dell to help with her technology needs and simultaneously earn even more Qantas Points.
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