HR effectiveness for SMEs


Often struggling with the burden of compliance, HR practitioners in SMEs can find it tough to practise their craft. When time and resources are in short supply, how do you get your message across to management?

Align culture with strategy

GMHBA executive manager of human resources, Tim Boyd, has no doubt about HR’s purpose. Any HR activities must aim to align workplace culture with the organisation’s strategy, he says.

His determination has led to an astonishing turn-around in employee engagement at the health fund.

Boyd is in a fortunate position compared with practitioners in many other SMEs. He’s a member of the senior executive group and leads a team of four for a staff of 180 in 12 locations.

This all-important ‘seat at the table’ gives HR credibility inside the organisation and Boyd has the resources to implement programs that help further the health fund’s goals.

Acknowledging that it can be difficult for HR to forecast savings in dollar terms given the intangible nature of many activities, Boyd says any business case should be clear about the expected results.

For example, the case for a new training program could include statements such as, “I expect this program to maintain our customer satisfaction scores, allow our staff to better use the new computer system and lead them to become operationally efficient in a reduced time frame”.

Link training to productivity

Showing the direct link between training and productivity is one way to overcome an organisation’s reluctance to support the cost of learning and development programs, says Boyd.

In his view, all organisations should consider collecting an essential set of numbers or HR metrics.

“Essentials are OHS requirements, absenteeism, turnover and leave management – ensuring that everyone is taking their annual leave when they should and that rosters are being managed.”

Beyond the basics, Boyd advocates a second category of HR metrics – employee opinion and engagement – that measure the degree to which workplace culture is aligned to business strategy.

“What’s the pulse of the workforce? Do employees understand the oganisation’s strategy? Are they engaged?”

Aim for compliance and leadership

But collecting any data at all is a stretch for many SMEs, where complying with the raft of laws and regulations is difficult enough to handle.

“Best practice HR is probably a stretch for small business,” says Greg Ure, CEO of beauty product manufacturer Caronlab Australia.

Despite Ure’s passion for HR, it’s compliance that takes most of his attention.

With a staff of 45, Caronlab Australia provides products to about half of the professional beauty businesses in Australia, says Ure, and exports to 14 countries. Ure manages the HR function and another staff member handles recruitment.

“If you aim for compliance and then do a little bit better than that, that’s great,” says Ure. “That’s our core focus – compliance and leadership.”

Sue Kelly from HR4Business, a Geelong-based consulting firm specialising in HR for SMEs, confirms that most small organisations struggle with compliance.

Award provisions, such as overtime rates, are often breached, she says. “I find it quite astounding that some businesses are still making people work a 40-hour week instead of 38 hours. Some people haven’t even heard of the National Employment Standards.”

The HR role at boat builder Jeff Sykes and Associates is combined with finance where Andrew Harris has been in the job for six months. With a staff of about 50, the firm designs and builds racing sculls for sale in Australia and overseas.

HR compliance has taken more time than Harris had expected. “There’s a lot of administration, more so than in my normal accounting role,” he admits.

His take on engagement is to practise it in person. “Initially, it’s been about getting a good rapport with all the supervisors, as well as the employees on the workshop floor,” he says.

“HR departments often don’t really know the people on the floor. But I’ve managed to get out and talk to most people and get a good idea of what they’re feeling and what they’re up to.”

Making a case

Even in small businesses, HR professionals can really add value by pointing out the key HR issues to the senior executive group, says Headway HR Consulting’s Carol Webb.

Measuring a basic set of events, such as turnover and absenteeism, and looking at performance reviews to see if average performers are productive, is a good start, says Webb.

Good data helps HR be seen as credible. “But you can’t just provide data – anyone can do that – you need to provide the insight and information. What does it mean? If turnover is high, is that a good or a bad thing?” Webb says.

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HR effectiveness for SMEs


Often struggling with the burden of compliance, HR practitioners in SMEs can find it tough to practise their craft. When time and resources are in short supply, how do you get your message across to management?

Align culture with strategy

GMHBA executive manager of human resources, Tim Boyd, has no doubt about HR’s purpose. Any HR activities must aim to align workplace culture with the organisation’s strategy, he says.

His determination has led to an astonishing turn-around in employee engagement at the health fund.

Boyd is in a fortunate position compared with practitioners in many other SMEs. He’s a member of the senior executive group and leads a team of four for a staff of 180 in 12 locations.

This all-important ‘seat at the table’ gives HR credibility inside the organisation and Boyd has the resources to implement programs that help further the health fund’s goals.

Acknowledging that it can be difficult for HR to forecast savings in dollar terms given the intangible nature of many activities, Boyd says any business case should be clear about the expected results.

For example, the case for a new training program could include statements such as, “I expect this program to maintain our customer satisfaction scores, allow our staff to better use the new computer system and lead them to become operationally efficient in a reduced time frame”.

Link training to productivity

Showing the direct link between training and productivity is one way to overcome an organisation’s reluctance to support the cost of learning and development programs, says Boyd.

In his view, all organisations should consider collecting an essential set of numbers or HR metrics.

“Essentials are OHS requirements, absenteeism, turnover and leave management – ensuring that everyone is taking their annual leave when they should and that rosters are being managed.”

Beyond the basics, Boyd advocates a second category of HR metrics – employee opinion and engagement – that measure the degree to which workplace culture is aligned to business strategy.

“What’s the pulse of the workforce? Do employees understand the oganisation’s strategy? Are they engaged?”

Aim for compliance and leadership

But collecting any data at all is a stretch for many SMEs, where complying with the raft of laws and regulations is difficult enough to handle.

“Best practice HR is probably a stretch for small business,” says Greg Ure, CEO of beauty product manufacturer Caronlab Australia.

Despite Ure’s passion for HR, it’s compliance that takes most of his attention.

With a staff of 45, Caronlab Australia provides products to about half of the professional beauty businesses in Australia, says Ure, and exports to 14 countries. Ure manages the HR function and another staff member handles recruitment.

“If you aim for compliance and then do a little bit better than that, that’s great,” says Ure. “That’s our core focus – compliance and leadership.”

Sue Kelly from HR4Business, a Geelong-based consulting firm specialising in HR for SMEs, confirms that most small organisations struggle with compliance.

Award provisions, such as overtime rates, are often breached, she says. “I find it quite astounding that some businesses are still making people work a 40-hour week instead of 38 hours. Some people haven’t even heard of the National Employment Standards.”

The HR role at boat builder Jeff Sykes and Associates is combined with finance where Andrew Harris has been in the job for six months. With a staff of about 50, the firm designs and builds racing sculls for sale in Australia and overseas.

HR compliance has taken more time than Harris had expected. “There’s a lot of administration, more so than in my normal accounting role,” he admits.

His take on engagement is to practise it in person. “Initially, it’s been about getting a good rapport with all the supervisors, as well as the employees on the workshop floor,” he says.

“HR departments often don’t really know the people on the floor. But I’ve managed to get out and talk to most people and get a good idea of what they’re feeling and what they’re up to.”

Making a case

Even in small businesses, HR professionals can really add value by pointing out the key HR issues to the senior executive group, says Headway HR Consulting’s Carol Webb.

Measuring a basic set of events, such as turnover and absenteeism, and looking at performance reviews to see if average performers are productive, is a good start, says Webb.

Good data helps HR be seen as credible. “But you can’t just provide data – anyone can do that – you need to provide the insight and information. What does it mean? If turnover is high, is that a good or a bad thing?” Webb says.

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