In creating the business plan for your small business, you may want to skip hiring Human Resources Managers? However, because of a new economy that allows very little margin of error, you cannot afford to risk the chance at growing or expanding your business.
When thinking about how to start a business, it is important to consider your biggest assets – the people who will run the business with you. As the name suggests, Human Resource focuses on managing people by keeping them motivated to perform better at work.
There is more than meets the eye for human resources, and this article will discuss in detail the reasons regarding their function in a small company or business.
Recruitment
To maintain efficiency in hiring employees, it is up to the human resources management department to ensure consistency and compliance in the process of recruitment and selection. Therefore, it is important that upon identifying the vacancies in the company, Human Resources should develop their own recruitment process.
Job Posting Information
Before posting your company’s job openings in its website or other third-party source, it is necessary that you, together with a job search committee, can develop the necessary position descriptions that specify the tasks expected of each employee. In articulating the responsibilities and qualifications, your company shall be able to attract the best-suited candidates for each job.
Sourcing
The process of finding resumes from qualified individuals, also known as sourcing, is the initial part of recruiting which helps human resources find qualified candidates. This term is used to refer to highly specialized searches for talents. There are some recruiters who find candidates through different sorts of methods such as creating sourcing functions through placements, or by hiring recruiting professionals who specialize only in the initial procurement. Despite hiring sources, however, it is still up to the human resources management division to take care of the later parts of the recruitment process.
Selection Criteria
The selection criteria, without a doubt, should be fair, objective, measurable, and directly related to the requirements of the position. A well-developed selection criteria could give a hand to attracting candidates with the necessary qualifications for applicants and could therefore lead to a more consistent method for assessing them.
In order to develop a proper selection criteria, you have to review the specific requirements of the job and determine the level of skills that the potential recruit should have to perform the tasks. To make the criteria more objective, making use of tests and exams as tools to measure capability is also encouraged.
Recruitment Process Outsourcing
As per industry standard, Recruitment Process Outsourcing, or RPO, is a form of business process outsourcing, where employers are likely to transfer parts of their recruitment process to third-party providers. RPOs can provide its own recruitment process and still be responsible for the results. RPOs can help your company find candidates in the fraction of the time and expenses that it normally would via a traditional recruitment selection because they tend to simplify the process with customized recruitment plans for your company’s needs.
Selection
Effective employee selection happens when there is effective matching from human resources. By selecting only the best candidates for the job, your can be sure that your company will receive only quality performance. Selecting the right candidates for the job will save your company a lot of time and money.
Reviewing and Shortlisting
It is not recommended to interview each and every candidate that happens to have a resume on your table. This is why it is important that you review their credentials to check if they have the minimum requirements as stated in your job posting. Once the initial review is done, you can get started on the preliminary or screening interviews. These are less formal setups that give candidates a brief regarding the company and job profile.
Upon clearing the preliminary interview, candidates are then required to fill application blanks that contain their data record and qualifications. Written tests to examine their aptitude, intelligence, reasoning, and personality can also be conducted to assess candidates’ potential objectively.
Conducting Interviews
Employment interviews are one-on-one interactions between an interviewer – usually part of human resources – and a potential candidate. The interviews are used to assess whether or not a candidate is suited for the job. Most human resource managers recommend coming up with questions for applicants in four categories: fact-finding, creative thinking, problem solving, and behavioral. The last, in particular, is found to be important because behavioral questions are likely to reveal most about how a potential employee could fit in to your company’s culture.
Selection of Candidates
The purpose of selecting candidates is to employ the most suitable one who can meet the requirements of the posted job. After assessing applicants and conducting employment interviews, it is then up to human resources to select the most suitable candidate as they see fit. While there is a negative connotation in selection that sees to reject inappropriate candidates, it does involve choosing the best in abilities, skills, and knowledge of the job as required by the company.
Hiring
Once you’ve found your perfect candidate for the position you are seeking to fill, there are still more steps to go through before getting a person on board the company in an official capacity. Some, if not most companies, go through background checks and employment references. Once all these are cleared, the following steps are still expected to ensue:
Job Offer
The use of job offer letters will ensure that the employment relationship will be off to a good start. However, it is important to set some guidelines because job offer letters serve as a legal basis for an individual’s employment in the company. This include salary and benefits, dates and times that need to be remembered (including due date for response about the offer, length of probationary period, and hours to be rendered per week), and relevant documents that need to be signed or submitted.
Job offer letters allow the company to itemize facts regarding an individual’s appointment, and can even serve as a critical reference point in case there is a need for negotiation.
Hiring of the Candidate
Once the candidate has accepted the job offer, human resources will have to complete the paperwork required, and an employee cannot begin working until all of them have been completed.
Onboarding
Once the employment has been finalized, the new employee is expected to go over the onboarding process, which is a strategic process made to integrate a new employee with the company and its culture. In fact, onboarding can be crucial in ensuring that recently hired employees will be productive in their jobs, and the process can last up to a year from the start of employment.
A new company is expected to implement a formal onboarding program that will help devise an action plan for new employees to assimilate in company policies and workflow, and allow them to get acquainted with the culture in which they will become part of.
Training
A new hire cannot be expected to automatically know the ropes in the company. In fact, good companies give their employees time to adjust during their onboarding period, and during such time, could start doing orientations and training programs to help develop employees, and in the long run, provide significant returns to the company.
Training Needs Assessment
First, you have to identify an individual’s need for training, and therefore look into their level of competence, skill, or knowledge in applicable areas, and then compare this to the level required for their position in the company. The difference between the new hire’s current and required competencies will then help determine what kinds of training they will have to overcome. Many companies make the mistake of assuming that all employees require the same training, but this is not always the case. In fact, the needs assessment will help you set learning objectives to measure later on.
Deriving Training Objectives
Learning objectives determine what you want your new employee to be able to do by the end of the training period. Learning objectives should be objective, performance-based, and clear, but most of all, its end result should be observable by the manager or immediate supervisor, and can be measured in some way. Once the objectives have been set, human resources can better utilize the information to help design a training program that will help determine the best way to train new hires.
Designing a Training Program
In designing a training program, you will have to consider the tools you will need to help make it a success. Remember, however, that one training program may work better than another, depending on your employee’s job description, and there are different ways to approach training, including the following:
- Mentoring – matches new employees with experienced employees who can give them a hand in getting a handle on the job as required.
- Cross training – allows departments to assist new talent in learning their roles within the company.
- Shadowing – a concept much like mentoring, but which a peer employee helps a newer one to better understand the requirements of the job, and to help them empathize with other branches.
- Talks and conferences – features educating employees about the company through guest speakers with expertise relevant to the position.
Implementation of Training
After designing the training program, it is necessary for human resource to be able to implement it. Each program is set to have measurable and reachable goals that could make it effective as a training system, however, it is also important that training will engage employees in order to determine its success. Do not stop at creating a pdf file for employees to read and orient themselves with the job. Instead, aim to develop a workforce with training that engages employees and help them become more motivated at doing their job well.
Evaluation
In order to properly assess the effectivity of a training program, employee progress is expected to be recorded in some way. By seeing employee development results, executives, managers, and employees alike will be able to understand the program better and alter employee training as necessary for future purposes.
Compensation & Benefits
Known to human resource management as C&B, focuses on the policy-making aspects of the employee’s compensation and benefits. While these things are tangible, companies also offer intangible rewards such as employee recognition, work-life aspects, and even developments. The term is then referred to not only as a discipline, but for the actual rewards themselves.
Guaranteed Pay
Employees are expected to have guaranteed pay – which is considered the fixed monetary compensation. Guaranteed pay is usually the sum amount that includes the base salary as well as allowances. The basic salary is determined by the prevailing market salary as well as employee performance. Allowances, on the other hand, can be paid to the employee for different purposes other than performing the expected job, such as being paid for transportation, housing, or meals allowance.
Variable Pay
Variable pay, on the other hand, is decided by the company based on performance or results achieved by employees. Variable pay plans include, but are not limited to bonus schemes, sales incentives and commissions, and overtime pay, to mention a few.
Equity Based Compensation
Some employers use their own shares to provide employee compensation. This is called equity-based compensation, and is commonly seen in the market as stock options, which can be granted to employees as a contract that allows them to purchase a certain number of shares of stock at the company for a certain price, subject to certain conditions over time.
Direct Benefits
Benefits are offered to employees as required by state laws. A wide variety can be offered, including paid time off, various types of insurances, retirement plans, or even company car access. Human resource departments are required to ensure compliance of offering such benefits as per federal and state regulations.
Some direct benefits include the following:
- Insurance – a form of compensation to hedge against uncertain losses, and could include, but is not limited to life, medical, dental, or disability insurances.
- Retirement Benefits – paid in either monthly pension or a lump sum to company members who have reached retirement age and could no longer be allowed to work.
- Daycare Benefits – helps parents transition in their return to work through subsidized child care.
- Disability Income Protection – a form of insurance that insures an employee’s income against the possibility of disability that comes with high-risk jobs.
Indirect Benefits
Indirect benefits are also expected to be provided to employees, but look different in each company because it should align with the strategic objectives of each business. Indirect benefits include professional development and career opportunities and even promotions. Simply put, indirect benefits are things that motivate highly skilled employees to stay in a company.
Performance Management
Performance management ensures that managers and employees work together to plan each person’s contribution to the company. It is a continuous process that sets objectives and assesses progress through coaching and feedback to help make sure that employees are meeting their work objectives and working towards their career goals.
Need for Performance Management
The goal of performance management is to allow employees to see how well they have performed based on their key performance indicators during specific periods. Many companies manage employee performance over a 12-month period. Performance management can be used in employee development planning, basis for compensation and rewards such as pay raises and bonuses, and even for consideration of mobility factors that could lead to an employee’s transfer or promotion.
Performance Management Process
The ideal performance management process should be effective in evaluating and measuring an employee’s performance. It is strategic, operational, and beneficial to the company by ensuring quality employee performance. The management process focuses on improving employee competencies to drive better results, and may include appraisals and reviews, employee feedback, as well as different performance measurement practices that focuses on learning and development based on the company structure. A good performance management process, therefore will be beneficial not only for the company, but for its managers and employees as well.
Safety & Wellness
Companies should also offer a range of programs and policies that ensure employee safety in terms of the health, productivity, and workplace security. Employees who feel safe in their workplaces tend to be more efficient in doing their required tasks.
Employee Assistance Program
The Employee Assistance can be provided for employees and their immediate family members who have problems that can affect their work performance. These plans are traditionally paid for by the employer and may include benefits such as counseling and treatments, if necessary.
Policies
Companies that recognize the importance of work-life balance can foster a culture of well-being by outlining safer and healthier workplace policies for their employees. Some of these include the following:
- Personal Leave Policy – can be granted for reasons that include, but are not limited to family issues, formal studies, illnesses and injuries, or other extenuating personal needs.
- Maternity Leave Policy – given to all pregnant employees regardless of the length of service, and can be as long as 52 weeks as per company discretion.
- Flexible Workplace Policy – a universal strategy that allows for flexibility in time, or place of work, shown to be beneficial to both employer and employee.
- Harassment Policy – ensures that a company provides a workplace that is free from harassment and protects victims from being in a situation where they are harassed by a co-worker or superior.
- General Safety Policy – a requirement for companies to provide safe and healthy workplaces with procedures dealing with emergencies such as fire, weather, and natural disasters, among others.
Firing & Termination
Whether you use the word “fired” or “terminated,” both mean that an employee is let go by the company involuntarily. However, most often, “firing” indicates a termination for a cause, such as unsatisfactory work or misconduct. Termination by Mutual Agreement Companies allow for employment contracts to be terminated by mutual agreement, which is rooted in a person’s constitutional right as “freedom of contract.” However, most companies use such termination practice in order to avoid legal and financial risks in the future. Termination of an employment based on such agreement will render the employee unable to benefit from job security provisions as stated by law, and will keep them from filing a re-employment lawsuit. However, the termination agreement is deemed invalid where corrupt intent is present.
Involuntary Termination
Involuntary termination, on the other hand is considered a severance from the company, at its discretion, without an employee’s implicit or explicit request. This is a unilateral authority from the side of the company and can be the result to any termination issues including performance problems, failure to report to work, or economic reasons, to name a few.
Handling the Termination Process
Performance-based termination does not usually come as a surprise to employees, however, it is important that a termination case is properly handled. Honesty is usually the best policy when it comes to termination, but it is never an easy conversation. Communicate effectively by being clear about the termination without humiliating the employee. Treat them with dignity: in private and behind closed doors, with a human resource representative or company lawyer in the room.
Human Resource Tools
Manage company employees better by utilizing technology that will help improve and streamline operations and processes. Online organizers and apps are now made available to help make human resource management easier. Some of the most popular tools include the following:
- Zoho – designed for small and medium businesses, it lets you track leaves, manage timesheets, create forms, manage tasks, and keep track of performance appraisals.
- Gusto – automates and keeps track of payroll, benefits, and provide HR support as needed.
- Bamboo HR – offers several programs such as performance management software, HR Reporting, Applicant Tracking Systems, and even Custom Workflows.
- The Resumator – helps companies find talent by streamlining and automating application and interview processes.
- Trakstar – an employee evaluation software that offers real-time feedback and set SMART goals for employees with strategic objectives to help them reach said goals.
List of Human Resource Duties HR
1. Audit and Assessment
Providing a measurement regarding quality of performance to ensure an employee will fit well with the organization.
2. Legal and HR Compliance
Ensures that the applicable federal laws as well as company policies are followed by employees and executives.
3. Employment Practices
Deals with legal areas regarding employees such as wrongful termination, sexual harassment, discrimination, breach of contract, emotional distress, and invasion of privacy, to name a few.
4. Employee Handbook
The creation of the document that discusses information about the company, including culture, policies, and procedures.
5. Employee Pay Practices
Establish compensation practices and rewards in recognizing top performers in the company. Any pay changes involve internal checking with Human Resources.
6. Employee Benefits
Ensures that mandatory benefits are given to employees.
7. Employee Engagement
Looks at the workplace approach that ensures the right conditions are given for all members of the company.
8. Recruiting and Talent Acquisition
Goes over the process of finding and acquiring talents for the benefit of the company.
9. Training
Training new talents to help them be the best in the workforce, to help retain employees and create a more productive work environment.
10. Executive Coaching
A strategic role in modern companies to increase employee retention, HR should be able to coach employees regardless of their level of expertise.
11. Business Ethics and Professionalism
Examine principles and morals, as well as any other ethical problems that may arise in the work environment.
12. Employee Rewards and Incentive Programs
Design rewards and incentives programs to increase work productivity and employee retention in the office.
13. Management Training and Development
Conduct job evaluation surveys and liaise with managers to assess needs of training and development in individuals, regardless of position or level of expertise.
14. Company-Employee Communications
Acts as middleman in internal communications in transmitting information between members, taking place in all levels and units in the company to help motivate staff and cultivate stronger bonds.
15. Workplace Safety and Security
Ensures that the company practices effective health, safety, and security procedures for the protection of employees and customers.
16. Workplace Conflict Resolution
Finds a peaceful resolution between employees in case of disagreement among them, whether personal, financial, political, or emotional.
17. Workplace Investigations
Conducts workplace investigations for a more successful resolution of complaints or defense against legal actions against the company.
18. Performance Management Systems
Used to establish performance measures and to communicate performance expectations.
19. Corrective and Disciplinary Action Plans
Communicates with the employee to help correct and resolve problems in performance, and help retain employee in the long run.
20. Interviewing and Onboarding Processes
Helps acquire new employees and help them get settled regarding policies and productivity.
21. Employment Separation Considerations
Ensures workers rights are protected upon the termination of an employee from the company.
22. Federal Contracts and Affirmative Action Plans
Outline programs, policies, and procedures for the proactive recruiting and hiring of employees, ensuring that the company is ready to meet their legal obligations regarding compliance of such contracts and plans.
23. Merger and Acquisition Support
Helps manage problems and challenges that may arise during the merger or acquisition process.
24. Organizational Restructuring
Helps manage the workforce by guiding employees on the process of the restructure, including outlining the program for each stage, including reviewing for potential litigation or claim assessments.
25. Daily Work Practices
Enforces routine and practices at work to help increase productivity on the floor.
Among the main responsibilities of HR professionals include hiring and recruiting new employees, including going over the process of contacting references and performing background checks on potential talents. HR professionals conduct employee orientation and goes over the onboarding process of all hired employees. In line with this, HR should also handle employee concerns, including acting as referee in case of disagreements, firing and disciplining staff members, and internal communications.
Human Resources professionals are also expected to follow a strict business management guide in accordance to the country’s labor laws, and maintain employment policies within the company, especially those relating to labor laws and regulations in local and national levels. If necessary, HR should also inform all the company employees regarding any policy changes, and are expected to keep records on all the employees for reference.
Finally, HR is expected to administer compensation and company programs and benefits for all employees. They are responsible for setting company salaries and benefits, including healthcare and pensions, and even arrange company activities such as team building events and organizing sports teams, if applicable.
Human resource professionals remain important in companies even small business in order to help manage employees and handle their training, compensation, and other human labor matters. They are expected to be organized, accurate, and thorough in their monitoring and assessment skills in order to ensure quality outputs from employees, and help them improve performance by providing quality feedback as necessary. Considering the bulk of their responsibilities, it is important that HR professionals have good oral and written communication, decision-making, and even customer service skills.