As your business grows, the Human Resources (HR) department evolves similarly to other sectors within your organization. A common observation during this phase is that small and medium enterprise (SME) leaders and managers often begin to focus more on HR but tend to compare their practices to those of much larger companies with more resources. While this comparison isn’t necessarily negative, it can lead managers to overlook the specific needs of their smaller organizations. So, what are the key differences between HR functions in SMEs and those in larger corporations?
Human Resources Compliance in SMEs
Business owners may not prioritize compliance due to limited resources, expertise, or time—or a combination of all three. Unlike organizations that are proactive and prepared, addressing compliance issues reactively can be costly, time-consuming, and adversely impact an organization’s reputation.
What does compliance entail? An HR-compliant business has well-defined workplace policies, including an up-to-date employee manual reviewed regularly, health and safety policies, and guidelines for workplace violence and harassment to name a few. It also conducts thorough onboarding, training, talent management and offboarding processes. With resources available from provincial labour ministries and local business organizations, achieving HR compliance is more manageable than it might seem.
For small enterprises, several tools can support compliance. Establishing these fundamental elements and accessing knowledgeable support to maintain them is crucial. If a comprehensive HR program is beyond your reach, services, including ours, can help establish a compliant foundation and provide ongoing assistance.
Using Human Resources to Attract Skilled Staff
Today’s job seekers place significant importance on HR programs and benefits when evaluating employment opportunities. Offering competitive total compensation and benefits packages, along with support for training and professional/personal development, can greatly contribute to your business’s long-term success.
One of the biggest advantages SMEs have over larger organizations is the ability to build close-knit interwork connections and offer more room for growth. SME HR teams can leverage this by offering:
- Flexible work schedules and working from home options where viable
- Supporting career development in line with employees’ career goals, thus benefiting both the business and its staff.
Human Resources and Retaining Skilled Employees
Retaining skilled staff is crucial, given the significant resources required to replace an employee. It’s common for organizations to focus on attracting new talent while neglecting the importance of retaining current team members. High turnover rates lead to increased hiring and training costs, which can shift focus away from business goals.
To retain valued employees, SME HR teams should consider several strategies:
- Maintain transparent communication about the company’s performance to help employees feel connected to its future.
- Offer opportunities for staff to mentor newcomers and contribute to the company’s development.
- Recognize employees’ achievements as vital to company growth and provide relevant, thoughtful feedback.
- Operate according to your organization’s values and clearly communicate its purpose.
Human Resources in Career Growth and Leadership
Investing in training and development might seem daunting for SMEs, but it is achievable.
We advise business owners and leaders to view training investments from a new perspective. Consider how supporting employees in developing new skills aligns with their interests and benefits the company. For instance, if a graphic design team isn’t currently part of the structure, supporting an employee in learning graphic design can enable the company to manage more advertising internally while enhancing employee engagement and skill sets.
Compensation and Benefits
Employees highly value work-life balance, flexible schedules, independence, personal health, and job satisfaction. HR initiatives that address these needs along with comprehensive total compensation packages (pay and benefits) tend to experience lower staff turnover and reduced costs related to absenteeism and new hire training.
Crafting a comprehensive rewards approach is complex. It must incentivize the right behaviours while remaining financially viable for the organization. Conducting salary surveys and analyzing results require specific expertise, and considerations around pay equity laws are essential.
Compensation is both an art and a science, and expert support can be invaluable in this area.
HR Tools
Historically, business-owner-administered HR relied on manual methods, spreadsheets, or multiple systems, leading to data errors, administrative burdens, and reporting inefficiencies. Searching for HR tools can be time-consuming and selecting a system that meets current and future needs can be challenging. However, choosing the right Human Resources Information System (HRIS) can accelerate business growth by offering several advantages:
- Accurate data for strategic decision-making.
- A unified platform for employees to track time and submit leave requests and managers to approve it, for staff to access policies, participate in training, performance reviews, etc.
- Enhanced HR function agility with personnel data readily available to authorized staff.
Before selecting an HRIS, it’s crucial to understand your needs and technology roadmap. Once ready to implement an HRIS, ensure you have the internal capacity to manage its ongoing administration, as no HR system will fully manage itself.
We’re pleased to report that affordable HRIS options designed to meet SMEs needs are available —just remember that upkeep is still required!
Conclusion
The key takeaway is that while SMEs may have fewer full-time HR resources, their adaptability often compensates for this. Smaller workplaces allow HR strategies to make a significant positive impact with less heavy lifting. Whether adjusting compensation strategies, retaining staff, attracting new talent, or providing professional growth opportunities, small and medium business owners have many HR levers at their disposal.
Strategies successful in large corporations often don’t align with the ethos of small and medium businesses. Seek out reliable experts specializing in small/medium business HR to support you. With the right assistance, the results can be outstanding.
Stay tuned to our series for a complete guide on managing HR for small businesses. In our upcoming article, “Recruitment and Retention,” we explore how to effectively attract and retain the best talents in your company. Prepare for practical tips to build a stronger team and boost your business!
