HR insights for small business

For small business owners, failing to adequately manage your staff can mean high employee turnover, low morale and costly fair work claims – it could even lead to the downfall of your business.

Speaking at a recent Bankwest Connect Event, Cornerstone HR managing director Christine Howitz said most people who set up small businesses were not trained in human resources (HR).

“Small business owners are not trained in managing workplace conflict, difficult employees or how to retain their star performer,” Christine said.

“HR is often given a very low priority because business owners and leaders are typically so busy chasing the next sale or paying the next invoice.”

“For small businesses, if leaders don’t respond promptly to employee issues, they can become serious and expensive problems later on.”

Here are some of Christine’s top tips to help small business owners get their HR house in order.

Christine said planning was one of the most important steps when it comes to managing people as it allows business owners to lay firm HR foundations. She recommends:

• Creating detailed position descriptions that clearly outline tasks, duties, skills, experience and qualifications along with the required behaviours you seek in staff.
• Implementing compliant employment contracts which include employment expectations, duties and probation and notice period clauses.
• Completing pre-employment police clearances for all roles.
• Creating a thorough orientation/on-boarding program for new employees.

Christine said business owners needed to look for people who would be their brand ambassadors. She said it’s important to take your time when hiring and recommends:

• Making it a requirement for applicants to include a cover letter detailing why they fit the role. Christine said if applicants won’t bother completing a cover letter when requested, it shows they can’t follow instructions which should be an immediate red flag.
• Being realistic about what you’re saying about the business to potential applicants. For example, Christine said you shouldn’t say that you have a great culture if that’s not the case as successful applicants will soon find out the truth and are more likely to leave.
• Conducting thorough screening by reviewing the criteria in applicants’ cover letters, completing phone screening for the top 5-10 applicants and then interviewing the final shortlist.
• To always complete reference checks for applicants, including speaking to their prior manager in the past 12-18 months.

Christine said it’s important for business owners and leaders to take the time to get to know their team and develop them. Christine said your team need to know your products and business and what it stands for. She recommends:

• Investing in your people through training, mentoring and professional development to help drive accountability and loyalty in your team.
• Continually providing feedback to your staff and pointing out any challenges you’re facing with them.
• Taking the time to understand employees’ goals and what they want to achieve in their career to help support their personal growth. Christine said even for small businesses which don’t have career ladders, owners and leaders can still draw out the employee’s strengths and play to these.

Christine said many business owners talk about culture but don’t really understand what cultures stands for. Christine recommends:

• Leading by example to create a good culture. Christine said culture is what you keep front of mind and do every day, and business owners and leaders need to lead by example. This could be as simple as saying hello to everyone in the morning and goodbye when you leave or having lunch with staff.
• Providing adequate training to employees, not only for new starters but for existing staff so they’re continually being upskilled.
• Implementing non-financial benefits such as recognition and feedback to staff as well as gratitude for work completed by employees.
• Talking to employees to gain feedback about how the business could be improved or what the business could stop/start doing.

Christine said terminating and transitioning staff can be one of the more challenging aspects of running a team. She said business owners and leaders shouldn’t put their heads in the sand when it comes to managing poor performance. She recommends:

• Completing exit interviews, which can provide excellent feedback and insights for business owners about the key drivers why people are leaving the business. Christine said people are more inclined to give candid feedback without fear of reprisal in these instances.
• Managing poor performing employees. Christine said such staff are typically driven by unresolved conflict in which they feel they haven’t had the opportunity to speak up and be heard. Subsequently these employees become less committed or engaged in their role.
• Acting quickly when disciplining or terminating an employee. Christine said people can take bad news but if you don’t act swiftly lingering uncertainty can cause more problems.
• Documenting all instances of poor performances and your efforts to address these to help protect you against unfair dismissal claims.