Common HR mistakes that SMEs make..
Or to put it another way, the costs of trying to do your own HR and not getting it right. This post explores two of the most common things I find when clients try to do the right thing, but get it wrong.
Mistake Number One
Question: Do you know how much it costs your business if a manager, fee-earner or director spends all day, all week, or a weekend searching for employment law advice on Google?
Answer: A lot more than you would pay me!
That's the first thing; the realisation that properly procured outsourcing is often the cheapest option. When you look at how much a director gets paid (which, let's face it, should reflect their value to the business) you are tying up incredibly valuable time on what is very often an administrative task. If you're searching on the Internet for employment law advice the other major factor at play is that you have no way of knowing whether the advice you find can be relied upon.
Employment legislation usually changes in both April and October, with additional cases going to tribunal on a weekly basis, the decisions from which do sometimes affect law. Even lawyers have trouble keeping up with all this, so how can a business owner, with all their other responsibilities, possibly do it?
Mistake Number Two
I come across this one a great deal. Many business owners, but particularly ones setting up a fledgling businesses, sometimes use HR documents and handbooks that they've 'liberated' from their previous company, you know what I mean.
The danger of this, apart from the obvious breach of intellectual property law and possibly even theft, is the fact that it is almost certain that some of these documents are going to be out of date before you even begin to start using them.
I recently came across the most poorly drafted employment contract I have ever seen in my career, and without naming names, it had been purloined from a national organisation. So much for bigger being better.
In short, HR and employment law is far too important to leave to chance, or the Internet, or to rely on the stuff in the boot of your car which you 'accidentally' didn't give back when you resigned from your job.
If you want to know how much money I can save you, contact me to find out.
One of the problems is, like searching for any service provider in whom you are going to have to place an enormous amount of trust, confidence is key. For example my accountant was referred to me by my brother, so I couldn't get any more of a personal recommendation than that.
We all know that most business people wouldn't think twice about using an accountant to do their books, yet they often hesitate about seeking help in other areas. I have a theory that it's not so much that they're not open to outsourcing, it's that they're not really sure what to search for. For example, I'm an HR Consultant, but many people won't Google HR Consultant, they are more likely to Google the actual problem they are having, for example something like Unfair Dismissal.
They then go onto spend (some might say waste) an inordinate amount of their time trying to get an answer to something that I could give them in five minutes. My problem is communicating this concept to as wide a customer base as possible. If anyone reading this has any ideas that can help, please let me know.
The other problem that I come across constantly, is when people do Google HR Consultant, they experience something approximately along the lines of the following:
They engage with some sort of large HR / business support company whose largest section of employees will probably be their sales force (that in itself should tell you something). The employer might even receive a visit from a sales representative with a fairly slick brief, who will emphasise the benefits of signing up to a contract of often many years duration, 'safe' in the knowledge that they will be covered by insurance for when the inevitably huge number of tribunal claims comes their way. They also receive reassurance that they will have dedicated support when they need it. This is all very well, but it is true?
More or less I suppose, except perhaps that the suggested inevitably huge number of tribunal claims is exaggerated, and the fact that 'support' is a subjective term. So whilst the above claims may be technically true, will the customer get not only what they think they want, but more importantly, what they need?
All my clients without exception appreciate more than anything else that I'm available on the phone whenever they need me, and that I will, if it comes to it, drop everything and come and see them in an emergency. That might mean mediating in disputes, sitting in on a final interview, or a huge host of other things that, if you were a larger company, you would ask the Human Resources department to do for you.
In fact not so long ago, I was asked a barrage of questions by a business person I met at a function, all about HR. It turned out that this person signed up to a very long contract with a HR support provider. I asked him why he wasn't asking them these questions, and he said that he wasn't getting the kind of response that he needed and he got the distinct (and most likely correct) impression that the different person he spoke to every time he called was reading the answer to his questions from a computer screen.
Draw your own conclusions as to why he was unsatisfied with this. If you, or anyone you know, is running a business and employs people, and who would like straightforward, personal HR support, director-to-director, then please give me a call.
Have a great week.