HRletes
Overcoming HR Challenges of SMBs

Our last edition talked about common challenges of SMBs. Handling of HR stuff and related issues are either the responsibility of the owner or any other leader. But complex HR issues cannot be dealt with by a business manager all the time because of pre-assigned responsibilities and having less or no domain expertise. Eventually, it leads to a loss of productive time, reducing their interest in HR stuff. The business owners must identify and understand such issues to tackle them at the earliest, as the business workforce grows.

Now let’s focus on finding solutions to challenges that we identified. Following steps can be taken with planned actions –

  • A well-defined recruitment strategy – It is crucial for any business to hire the right people at the right time with affordable cost. Although the performance of a new hire can never be assured, steps can be taken beforehand to develop a robust recruitment strategy. Following steps can be taken –
  • Developing a complete job description for all the positions
  • A fool-proof screening process
  • Use of psychometric tools in the hiring process
  • Promoting strategies like WFH and hiring freelancers/contractors
  • Creating workforce diversity for new dimensions of knowledge and experience
  • Developing a strong referral policy
  • Internal Job Postings
  • Keeping good records – As an employer, you are responsible for recording and maintaining your employee’s information. The employer needs to trap employee’s demographics along with the employment journey within the organization. The Easiest way to do this is listed below –
  • Make an employee file
  • Implement a proper HRMS system to record details electronically
  • Conducting annual HR audit to assess the record-keeping process
  • Setting deadlines and protocol for record submission and completion
  • Build a skill matrix to identify the current competency and skill level
  • Developing a formal on-boarding program – Small businesses should create a structured induction program for new hires so that the trade, policies, people, and culture can be detailed. Following steps are advisable –
  • Making a pre-on-boarding process to involve new hires
  • Developing a detail induction and orientation plan with specific timelines involving key stakeholders
  • Developing manuals and handbooks
  • Hiring a Trainer who specializes in Induction programs
  • Involving the senior leadership team to share Vision and Mission
  • Introducing an accurate payroll system – Systematic payroll is crucial to get an error-free payment to employees and calculate the right amount of government taxes. The general steps to be considered can be –
  • Consolidation of correct salary inputs with supporting documents
  • Setting a payroll cycle with specific timelines
  • Use of appropriate payroll software or agency
  • Conducting monthly payroll audits
  • Create a monthly reporting system
  • Introducing a DBMS – Every business directly or indirectly captures, compiles, and uses data for day to day operations. Companies must have a robust database administration system to increase proper visibility of information related to employees, customers, and the market. Below points to be kept in mind –
  • Developing a well-defined data strategy for collection, compilation, usage and accesses ability of data
  • Selecting a suitable DBM software or agency to design the process
  • Establishing checkpoints to ensure data safety
  • Developing a backup strategy with a support system
  • Setting up of an integration platform using technology
  • A Total Rewards strategy – Employees respond to benefits, rewards, and incentives. Employees feel engaged when they are adequately compensated and rewarded. SMBs should, therefore, design a meaningful compensation strategy that can motivate employees’ performance. It can be done as below –
  • Carrying out a job evaluation process
  • Conduct compensation/Remuneration Surveys
  • Defining a Total Reward strategy based on compensation philosophy
  • Compensation benchmarking
  • Develop pay grades and ranges within the organization
  • Identifying suitable incentive plan, benefits, and perquisites
  • Establish a PMS cycle
  • Developing policies and processes – Policies are rules and procedures are specific actions that guide an organization in meeting its objectives. They set expectations for employees’ behavior and outlines steps for it. The following steps can be taken into account while developing them –
  • Identifying a problem statement or challenge to address
  • Idea generation and brainstorming
  • Taking the management buy-in
  • Experimentation and implementation
  • Assessment and modification
  • Documentation and communication through appropriate channels
  • Sufficient Training Programs – Employees are the company’s best asset. Businesses that invest in their workforce enjoy faster growth and competitive advantage. But mainly small businesses devote less time to train new hires because of non-tangible ROI. Employees consider development, a motivating factor for growth, which in return increases the efficiency and productivity of the organization. I advise the following steps to design, develop and implement an effective training program in any organization –
  • Analyze the performance problem
  • Set a process for TNI
  • Identifying the goals and objectives of training programs
  • Designing the training materials
  • Implement the training
  • Evaluate and modify if required
  • Developing a compliant culture – Employment laws form a major part of any organization and govern small businesses as well. It helps develop an ethical culture and helps in brand building. An HR should keep the following in mind –
  • Completion of registration, licensing and permits for business
  • Identifying the applicability of employment and labor law
  • Keeping an eye on recent changes and amendments on laws
  • Consult a compliance expert or agency
  • Handle compliance and regulations with a serious approach
  1. Setting proper communication channels – The informal method of communication is not appropriate for any growing business. There should be a formal source of communicating the company’s information, values, and business performance with decisions. Any company can look for following steps as per suitability –
  2. Starting a newsletter with a proper email marketing strategy
  3. Launching Intranet tools
  4. Encouraging feedback from both internal and external customers
  5. Documenting the company’s values, policies, and procedures
  6. Conducting periodic surveys
  7. Implementing conflict resolution techniques

Conclusion

We identified multiple challenges surrounding SMBs and strategies to address them. Small businesses have options to tackle these challenges through a well-designed HR system and practices. Outsourcing all or some portion of HR is usually a popular solution for business owners in today’s competitive global environment. Alternatively, SMBs can hire an HR Consultant to advise on critical HR matters. Experienced HR professionals can streamline the processes through best practices, strategic initiatives, and change management. It is only when the organization can retain quality talent and sustains a long term growth.

At HRletes we understand your requirements in your frame of reference and deliver the solutions with a design thinking approach. Our comprehensive services, including Hiring, Payroll Administration, HR Outsourcing, Compliances, HRMS help your business improve HR functions. We take care of your Human Resource Management while you focus on your business.

So let us LETES with your HR issues and concerns

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