The Need For Startups & Small Businesses to Focus On HR
According to a recent survey by the Confederation of Indian Industries(CII),80 percent Startups and SMEs do not have a formal HR department. Another startling fact is that in 90 percent of companies, there is no empowerment in this function. In most cases,the HR's role has been largely administrative in nature.
CEOs of Startups and Small Businesses may doubt whether it is a necessity or mere luxury to show more attention to human resources. There can be myriad reasons for the absence or lack of a proper functioning HR department to implement various people related policies and practices like talent management, engagement, compensation & benefits and more. However, it can be quite disastrous for a small business or startup not to hire the right kind of people and attract too much attrition. This often takes critical intellectual property, enormous hours of orientation, training and opportunities.
• Employees First: The success of any small business relies on its employees. People are the key success differentiators for these businesses. If employees are carefully chosen, nurtured, motivated and
• Synchronize it: A good CEO can synchronize the efforts of people, cash flow, targets, expansion and keep the business running on profitable lines. If we hire non-efficient people, who do not put sufficient effort,this synchronization will fail and CEOs would not be able to afford the losses. So, once again, human resources play a crucial role.
• The Compass: A small business requires HR Office as it acts like a compass. Apart from sales figures, if there is one variable which would tell where are you heading, it is your HR information. To a great extent, a small business will assess its growth through its ability to sustain people for a longer time and build a great career for them.
• Policies: When you start a new business, it is quite unusual to put all policies in place. While expanding, written rules are mission critical as this can enable consistency to a large extent. For example,a written employee leave policy when circulated among employees can help cut unnecessary queries, policy violations,and unplanned leaves. The HR department can put into practice the policies in far better and effective way.
• Time is Money: We look for honesty and best efforts of employees. Self-discipline is great but we cannot expect this all of a sudden. On top of this, managers can keep a good track of productivity. Standard practices will evolve over a period of time. HR departments can oversee and track the progress and help the organization to get along with a good work culture.
• Last Not the Least:How long you print paper forms, generate memos, cut the check and scrutinize spreadsheets? This is too tedious and consumes precious time of key stakeholders.
Human resource management is essential for businesses of all sizes. The problem is even more acute in smaller organizations and startups, where the CEO is involved in all HR related discussions and decisions. Companies need to take time out to put together appropriate human resource setup for better operations not just for short term but its impact on the long term. Employees are different from other lifeless assets of a business. They are highly sensitive and intelligent. From selection till separation, startups and SMEs do not have the comfort of trial and error when dealing with HR. Hence, a well-balanced people practice that suits the real requirements of the business shall cut down overhead costs, infuse and open channels for quick, pro-active and effective decision making. It is beneficial to automate people processes wherever necessary.