Far too many entrepreneurs focus only on developing and adhering to an effective sales and growth strategy. While this is certainly important for business performance and meeting any short- and long-term organizational goals, you also need to dedicate time to creating an effective human resources strategy.
A well-written strategic HR initiative can give your small business a competitive edge, helping you retain and motivate existing employees and hire new talent that can help take your organization to new heights!
We want to help your business grow, which is why we are going to cover why an effective HR strategy is so important for any growing small business. From there, we explain how you can write an HR strategy that will help drive your small business forward.
What is an HR Strategy?
Essentially, an HR strategy is a formally written strategic plan that aligns your employees to ensure they are working towards the needs of your business. When written properly, an HR strategy will ensure that all of your employees are moving in the right direction.
While a successful HR strategy depends on many factors, including the complexity and size of your business, it will be a well-written document that details the people-side of your business. As the name suggests, it outlines how you manage the human resources your business has at its disposal. Your HR strategy covers everything from employee relations and recruitment to motivating your staff and ensuring productivity.
Why Should All Small Businesses Have an HR Strategy?
Any business with employees who are dedicating their time and efforts where they are most effective will experience greater growth than a disorganized business that struggles to attract new talent and retain effective employees.
Establishing a healthy workplace culture by implementing an effective human resource strategy could be the difference between sustainable growth or a complete failure for the entire business. In fact, according to the Australian Bureau of Statistics, the survival rate for small businesses tends to sit around 59%, which means a significant number fail. By ensuring that your small business has its HR strategy in order, you can avoid some of the costly mistakes that cause many small businesses to fold.
Not only is an HR strategy important for making sure that your business is operating in a legally compliant manner, but it is also a cost-effective way to align your business towards its ultimate goal – sustainable growth!
Writing a Human Resources Strategy for Your Business
Now that you understand what an HR strategy is and why it is important, we will explain the steps required to put together a successful one.
1. Assess the Company’s Existing Resources
One of the first tasks you need to complete to write an effective HR strategy is to assess the assets your business has at its disposal. What sorts of skill sets do your existing employees possess? Not only will this allow you to take stock of the talents you have within your organization and make sure you are utilizing them effectively, but it will also help you identify potential gaps you need to fill. This will inform your future recruitment efforts.
By taking the time to analyze the current skills your business has access to, you can determine whether or not you need to hire new people or refocus and retrain your existing employees. While it can be unfortunate, you may also discover that you are wasting time and money with employees that no longer have the skills your business requires. Terminations are never pleasant, but a streamlined organizational strategy can be necessary to ensure your business is not wasting time and other resources on ineffective employees.
2. Review the Overall Structure of Your Business
Once you have a grasp on the types of skills your current employees have as well as what you will need from future employees, you should revisit the essential components of your business. Reassess job descriptions, compensation figures, and the hierarchy of your organization.
When you understand the various roles and requirements for all of your employees, ensure that your training programs are appropriate for those positions. An appropriate and effective training program is an important component of strategic human resource management. You should also include ongoing training, upskill courses, and interactive workshops to advance employee performance and skills in this segment of your HR strategy.
3. Outline How You Will Effectively Motivate & Retain Employees
Not only does your business need to hire the right people, but you also need to find a way to increase employee engagement and improve retention. High turnover can destroy a small business before it has the chance to establish itself.
This aspect of human resource management is about developing ways to motivate and inspire your employees and secure their loyalty. Employee perks, competitive compensation, and achievement-related rewards are all important. Coming up with a reasonable yet healthy work-life balance will help with employee satisfaction.
4. Ensure Legal Compliance in Regards to Your Employment Practices
You will need to ensure that your business complies with all relevant employment legislation. There are workplace laws and standards every company must adhere to, regardless of size. Hiring, onboarding, payroll, and terminations can all be fairly complicated processes, but your business must consider the appropriate workplace legislation when writing your HR strategy.
5. Seek Outside Help from HR Professionals
Writing an effective HR strategy can be a complex process. Working with external consultants specializing in human resources can make a massive difference for your entire organization.
At HR on Hand, our passion is partnering with small businesses to help develop effective human resources strategies, so they can increase productivity and profits. By working with professionals and undergoing a thorough audit of your current HR strategy, your business can thrive and continue to grow sustainably.
We are dedicated to helping small businesses succeed with effective HR strategies, which is why we offer a wide variety of free resources and helpful tools.
Visit our Free HR Resources Page to find a variety of documents that can help you manage and improve your existing HR decisions and strategies.