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

Common HR challenges of small and mid-size business

Human Resource forms one of the most important components of any business. But in small or mid-sized companies (having 5-100 employees) development of an HR function is a gradual process that happens when the business becomes stable and mature. However, the growth period is the time when such companies face the greatest HR challenge. Mostly hiring senior HR professionals is not a viable option considering the increased cost. The focus on revenue generation, client acquisition, and improvement of product/services push the HR to the back seat. Inappropriate hiring, undefined policies, non-aligned processes, and lack of proper communication between employees and management are usual issues when the value of HR is not readily apparent. As the company and workforce grow, small business owners should be aware of the HR challenges, so they’re prepared to tackle such issues at the earliest.

Here are today’s most common HR challenges small companies face in the business –

  1. Hiring Mistakes – Small business owners face a variety of challenges when it comes to recruitment. The process is difficult and time-consuming because of no recruitment expertise. Improper handling of the hiring process can make the company settle for a candidate who seems to be a fit on papers but not suitable as job requirements. Employers fail to analyze recruitment strategies to identify, attract, develop, and retain talent as per their business needs.
  2. Chaos in record-keeping – Accurate and proper documentation facilitate decision making in the organization. Documentation forms the base of the HR function, but a casual approach to it can result in legal issues. Small businesses face challenges in record keeping because of lack of proper template, and formats. In addition to employee information, it is important to document company policies, procedures, and benefits to create a transparent working culture.
  3. Lack of formal Induction program – Induction is a well-planned program to acquaint the new joiner with organization, people, and workplace. Absence of a specialist to design, organize and conduct a formal induction program for employees pose a lot of challenges for SMEs, in the form of new hires fit in, role clarity, acquaintance with colleagues, and company culture.
  4. Unsystematic Payroll Management – Payroll is not just paying employees, where on one hand it ensures on-time employee payments it should also assure business compliance with applicable laws and regulations. Small businesses usually suffer in this domain because of unplanned processes and systems. The failure to collect correct information on time results in faulty and late payments with non-compliance, fines, and penalties.
  5. Improper Database Management – As the business grows the related information in the form of data increases. Eventually, the time and effort required in its collection also increase. But all these go in vain if this information and data are not properly handled, and organized. The absence of proper data strategy in small companies creates a lot of challenges in collecting, storing, sharing, and using data for business decisions.
  6. Compensation and benefits – Because of their attention on revenue, SMEs fail to do an appropriate compensation benchmarking. That results in an inappropriate pay mix for the employees. It would not be easy to attract talent if the company is not aware of the right amount to offer, to an employee. Along with this identifying an appraisal cycle, deciding on benefits packages like health insurance, retirement plans, training, and development programs are crucial factors for potential hires. Understanding them and deciding on a suitable mix is one of the key areas small businesses struggle.
  7. Unclear job description – Start-ups and small businesses often take a casual approach when it comes to assigning proper roles and responsibilities to employees. It’s usual to see everyone pitching in to do all kinds of tasks leading to confusion and resulting in inefficiency. One of my HR friends was discussing the same issue in her current organization and looking for a suitable strategy to address it.
  8. Talent retention – Even after having sufficient budgets some small businesses struggle to retain employees because of competition and unplanned retention strategies. When employees’ issues are not handled by proper HR management it is difficult to retain quality employees and impact the business growth negatively.

Small businesses face myriad other problems apart from above because of no in-house HR function or a specialized Consultant. This can lead to dis-satisfied employees and affect the ROI through employee turnover. But if we address all these challenges with a well-thought strategy their impact can be mitigated and the organization can be brought on the path of success. An experienced HR professional or Consultant can advise on critical issues and strategize the HR processes to maintain and sustain a growth pace.

Let’s check on the solution and strategy to address such issues and challenges in our next write up. Stay tuned and safe till the next edition.

There is something best about her – she is self-aware

Radhika is a highly admired Manager of a small team. Calm and confident, She is empathetic and serves people in their frame of reference. She is hardworking and never gives up or discouraged when things don’t go logical. With her ability to deliver, and creativity to think out of the box she can demonstrate high performance in projects of utmost importance. She handles the situation with a solutions approach instead of escalating them. Her team finds her emotionally stable and psychologically feels safe around her. She empowers them by pointing out their potential and avoid micromanaging. Her colleagues feel happy to have a trustworthy, friendly co-worker and often compliments Radhika for her calm. I see people in the company greeting her with flowers and cards because of her empathetic and kind behavior. Married to a successful businessman she remains preoccupied with personal commitments but she keeps herself aware, accepting, and attuned to hers’ and other’s needs. Apart from having abilities of achievement, conflict management, teamwork, and leadership, Radhika demonstrates high levels of empathy and self-control. You would now be wondering who Radhika is?

Radhika Kaushik was the Team Lead with Philips Electronics, working in the capacity of Manager – HR she handles the regional HR team for the north. I always felt lucky to have such an easy and outgoing Leader for our team. Now, what is best about Radhika? Yes, She was on her high levels of emotional intelligence, which always keep her ready to take any kind of challenge in life. People like her demonstrates mastery of emotional ups and downs because they are aware of who they are and who they aren’t. It is so paramount to remain self-aware of who we are?

You would be curious to know more about Self-awareness. Being familiar with our inner self, strength, weaknesses, thoughts, and coding is Self-awareness. Most people when you ask them who they are, they’ll give you their name, profession or relationship. This is because they fail to identify their inner-self, the personality they are carrying within, the skills and abilities they are gifted naturally. They won’t look deep inside and discover who they truly are, who they truly are in their call. We are born with a soul and spirit and we grow up learning from those around us. So we need to know who we are, to align ourselves in response to one another’s needs. Now let’s deep dive to know what Self-awareness is, and how can we improve it.

Self-awareness is a conscious knowledge and perception of one’s own personality including character, emotions, strengths, weaknesses, beliefs, and actions. It helps you identify yourself, understand others, and their perception of your behavior in a different situation. Self-awareness gives you a direction and focus to determine your emotions and behavior in life.  Being self-aware helps us understand our behaviors and the effect on people around us. If we learn to recognize our emotions and reactions we can work to improve on any that we think are negative.

There are various benefits of being self-aware as below –

  1. Knowing about your inner-self and personality makes you grateful for who you are
  2. Keeping yourself aware can help you get along with similarly coded people and get rid of toxic people in life
  3. Knowing who you are and will help you live and work in the present
  4. Being self-aware increases your productivity and boosts your confidence.

Now we know the importance of self-awareness, let’s find out some ways to develop it.

Here are some strategies to become more self-aware-

  1. Meditation –Apart from weight loss to depression relief, meditation is also a powerful tool to learn about our patterns, mind frame, and thoughts. Meditation develops a calm and pleasant state of mind and drags our focus in the present. This can be done by breathing, exercise, imagination, and visualization with a relaxed body posture.
  2. Know yourself – The foundation of who you are lies within you. Discovering yourself by asking certain questions can get you to look at the bigger picture. Why you feel a certain way, what are your reactions to circumstances, what you want to achieve, whom you want to get along, or avoid can help you find out things that perhaps you do not even think of. One best way to do this is to take some psychometric or personality tests. On my journey of transformation, I went through multiple personality assessments which helped me identify my inner self, know my coding and patterns. You can opt for the same as per the authenticity and reliability of the measuring scale and parameters.
  3. Ask people around you – You can get great insight from your friends and family about their perception of your actions and behaviors. This will give you a third-person outlook of yourself. You can ask them to write about you and then try to identify the key concepts, which will help you improve and strengthen your self-awareness. But please make sure they only mention the best in you, the negative aspect would be done at a later stage.
  4. Know your baselines – They are the foundation of who you are, the core of one’s identity. A baseline is our core quality through which we feel and live our life. Our subconscious mind picks them up from different life experiences and the people around us. Awareness of our baselines helps us take great decisions, correct our actions, and get the desired results.
  5. Identify your Buzz Moments – Buzz moments are the happiest moments you create by doing activities that you love or what comes to you naturally. This can include any activity reading, cooking, painting, coaching, playing sports, or anything that you love, passionate, or good at. The intent is to identify more such activities in one’s life which makes the person happy and feel relax, this results in increased self-awareness.
  6. Ask for feedback – How often we deliberately ask for feedback? It’s very rare. However, we ignore the fact that constructive feedback is crucial to identify our blind spots and areas of improvement. Good feedback given by others is the fastest way to grow and improve ourselves. I always ask for feedback from people with whom I have enough relationship credit.  I can recall Radhika’s ability to deliver genuine and even difficult feedback to people. I thankfully acknowledge her constructive and valuable critique to me and my work which helped me in improving my work and relationship with then and future customers. Maintaining a continual I have always asked for feedback from appropriate people and taken it well to improve myself.

I was always fascinated by the aura Radhika depicted in her personal and business dealings but was not aware of her one quality of being self-aware. And finally one day she revealed her secret since then I started working on it and still continuing the journey of transformation and increasing my self-awareness. I thank all those people who directly or indirectly contributed to this transformation and continuum to improve on my self-awareness.

Considering further the development platform I still see plenty of other activities that we can dig into to improve our self-awareness irrespective of where we stand now. In the end, we all want self-awareness to live and lead effectively. It explains our successes and failures. A better understanding of who we are, help us remain self-aware, authentic, and open. It also impacts other aspects of our life, especially our interpersonal and intrapersonal relationships. So guys, are you self-aware? If not, strive to be mindful and identify new dimensions with possibilities. Feel free to reach out to me if you desire to explore

Promoting a new normal – what is positive about corona pandemic

Over the last few months, we have been witnessing the lock-down period because of this pandemic, COVID -19. This new normal of quarantined lives and social distancing has kept people sealed indoors to avoid chances of contamination. While people are rarely leaving their homes they feel bored and frustrated, which affects their well-being and drifts them into negativity. When the majority of people are negative about the pandemic, I believe that not everything about the corona virus pandemic is dreadful. We indeed experienced negative emotions because of this outbreak and the subsequent lock-down but it has also left some positive impacts on our lives. I would like to focus on the below aspects –

  1. The clean and green environment – Curtailments on movements, traffic and, business activities have considerably reduced pollution at a global level. NASA Satellites have documented significant reductions of around 20-30% in air pollution. We can now witness cleaner air, green environment and, bluer skies. There has been a significant dip in the Air Quality Index (AQI) across the country because of less greenhouse gas emissions. Delhi and other metropolitan cities of India are also enjoying the lowest levels of air pollution as recorded in the last decades.
  2. Improved Social Life – As the pandemic becomes a bigger part of our daily life, it has changed the way we think, behave, and relate to one another. The struggle to survive the pandemic has developed a high degree of cooperation amongst people by promoting a sense of togetherness and concern for each other’s well-being. Now people are more concerned about strengthening family relationships, inquiring about neighbors’ health, caring for needy, and serving the poor ones. Indeed the poverty and suffering levels have also increased but we can also see a sense of harmony amongst people to extend their help, wherever required, in their best possible manner. We notice a lot of individuals and philanthropic organizations taking effective steps to support the victims and help them in sustenance, thus encouraging and strengthening humanity in fighting the situation.
  3. Health Consciousness – The initial phase of the pandemic witnessed behaviors of anxiety, depression, and anger amongst people.  But later on, people started identifying ways to relieve stress and improve both physical and mental health. As a result, people reported working on their diets, eating fresh and rich ingredients food, cutting on snacks intake, and practicing a balanced lifestyle. The increasing concern of physical well-being inspired many people to start a home workout, yoga, and meditation. With the support of many online health and yoga gurus, people around the world are now more creative with their home workouts. This has helped many in reducing the dependency on local gyms and clubs.
  4. Cordial Family atmosphere – The changing home dynamics of people remaining indoors has increased the household work especially for women. The never-ending task of cooking, cleaning, washing has increased manifold with no domestic help into the picture because of lock-down.  The situation becomes more of a nightmare for working women transforming them into a multitasking superwoman overnight. But a good thing to notice during the lock-down is, male actively taking part in the household. I see men and young boys posting pictures of themselves sweeping floor, doing the dishes on social media platforms with an attitude to help their wives, sisters, or mother. This attitude helps break the stereotype and created a cordial home atmosphere during the lock-down period.  I appreciate the progressive and intellectual attitude of the male counterparts in developing a supportive household culture. It can be viewed as a welcome change and a successful step towards the fight against gender inequality as it helps build a civilized society with no gender biases.
  5. Up-skilling – This unprecedented COVID crisis has proven beneficial because of numerous learning opportunities easily accessible from home through online platforms. Many of us have utilized this time to enhance skills for better career opportunities considering long term growth. A recent survey conducted by Naukri.com revealed, close to 50% of job seekers devoted their lock-down time on self-development. Most companies have also offered an online interactive training and development program for its employees. This has helped people to come up with new skill sets adding value to the current and future talent pool.

I accept that we are going through a challenging time, but this situation has also given new normality to our lives by positively impacting our health, relationship, and social lives. Despite difficult external conditions people all over the world people have understood the importance of a meaningful life which focuses on the betterment and harmony of self, humanity, and nature as well.

Core Skills for HR Consulting

In earlier days the Human Resource department used to be more about record keeping, compliance, payroll administration, and event planning. This confined HR to be in a monotonous job with limited skill sets required to deliver the job. Even now I notice some organizations viewing HR in the same traditional cocoon of an administrative and transactional function, but the good and smart ones see it as a more strategic function. In my previous article, I talked about the changing economy and the need for HR to adapt and transform them as specialized HR Consultants. I will try to focus on the required skill sets for HR’s to maintain pace with the change and remain strategically important for the respective department and organization

The role of HR is more complex as of now. Today’s HR leaders are now expected to be a broader thinker, tech-savvy, adaptable, and agile enough to deal with a diverse and multi-generational workforce. The focus for HR is now to become a worker-centric function, spending their energies in building the organization culture and becoming a trusted workforce advisor. The organization today expects HR to be more influencing, data-driven, and credible concerning stakeholder management and workforce planning. This pushes HR to up-skill in critical areas and thrust on a more promising consulting role to manage human capital effectively. HR professionals will need to equip themselves with following skill for future success –

  1. Business and Financial Acumen – HR professionals should focus on understanding the organization’s business, functions, and external environment in which it operates. HR needs to identify the Why, What, and How of any business as this will help in taking decisions aligned with business goals. In all the organizations I have worked I used to devote ample time with the Business Managers in understanding different mandates to understand the role, responsibilities, and the alignment of position with business results. This always helped me in identifying a suitable fit. Designing of processes was also easy with an acquaintance of the Manager’s pain points.  The Financial domain is one of the important aspects which an HR should focus on. HR should be able to understand the cash flow statement, Balance Sheet, P&L account, and other metrics like Financial Ratios, ROI, Earnings, and Budgeting. A good way to gain this perspective is to consult with colleagues in Finance, regularly discussing the issues faced by the Managers and brainstorm supportive HR initiatives. Understanding the Business and Financial perspective can support HR in providing Consultation to senior management and help HR in aligning the HR activities
  2. People Analytics – HR people are now expected to be more analytical and data-driven. HR is fortunately involved in collecting a vast amount of people’s data, (almost 80% captured at the time of recruitment) which often remains unused. But the recent trends made HR analyze this data and link this with people’s problems. This can be used to attract, manage, and retain employees and improves on the ROI. To cite an example, an organization would be more capable of deciding on an appropriate pay mix if it is aware of the workforce demographics. The Recruitment process can be improved by the use of proper hiring metrics like CPH and Yield Ratio. Furthermore, analytics also help in testing the effectiveness of various HR policies and interventions. Companies like Ford, American Automaker, relies on insights gained through analytics in decision making for its workforce. HR can leverage the power of data analytics to make a better work environment, maximizing the productivity of the current diverse workforce of Millennials, Contractors, and Freelancers. The designing of proper programs, policies, and benefits for the current Gig workforce can also be addressed by creating a measurement system through data analytics
  3. People Skills – Technology doesn’t make the HR redundant, there is always a room for value addition if HR focusses on people. I see the future HR Managers as more of a Coach, Trainer, Motivator, Influential Leaders, and Change Managers. The current scenario of COVID-19 spread has impacted lives throughout the world, transforming the traditional workplace into a virtual world, making the workforce vulnerable to emotional distress and anxiety. Ensuring productivity and engagement now are primary concerns for every organization. In times like these HR should focus on social connection and engagement to maintain productivity levels, along with ensuring that employees feel supported, connected, engaged, and can take care of themselves and family. HR Should so focus on a new Consulting and influencing role equipped with skills of empathy, coaching, and leadership. A people-oriented HR professional would be able to guide individuals in their career prospects as well and coach Managers in becoming better people leaders
  4. Design Thinking – The concept of Design Thinking is transformational for HR as it brings a Human-Centric Approach to problem-solving. It brings an innovative approach to HR deliveries by organizing work and finding appropriate solutions based on people’s needs. Keeping the employee at the center of its delivery model HR identifies new approaches to design processes that deeply resonate with them. The process of Design Thinking starts with understanding the needs and frustration of customers with empathy, defining the problem, brainstorming solutions, choosing the most appropriate ones, and testing the applicability of suitable ones
  5. Compliance Mastery – Laws and policies are ever-changing and vary from state to state. The Corona virus pandemic has also impacted employee rights and lives together with employment conditions at workplaces. HR’s need to pay careful attention to relevant labor regulations while hiring, appraising, disciplining, and firing staff, failure to which can lead to heavy fines, expensive lawsuits resulting in discontented employees. HR needs to stay abreast of compliance issues by researching HR legislation and changes, attending appropriate training, seminars, and network with professionals who are tasked with the same HR responsibilities. In addition to this HR should also be flexible enough to comply with laws related to the Gig economy and remote workers to address concerns of the new economy
  6. Marketing or HR Branding – Marketing activities help HR in better talent management. HR professionals should be able to market the benefits, culture, and values of the organization. They should partner with the marketing team to develop scripting phrases, videos (like Employee Speak), and promotion on various media platforms. This helps HR in building an employer brand and creates a high-value proposition for the organization

All the above skills indicate that HR should transform as more specialized Consultants to cater needs of the rapidly changing world of work. As Specialists, they should equip themselves with a new range of skills, introduce new bold strategies, tools, processes, and metrics to create and sustain a successful employee experience for existing and future workforce