The 40th hire by any small business should be a human resources representative, according to a leading HR proponent.
In conversation with BusinessWings, Anne Corder, the founder of Anne Corder Recruitment whose career in HR spans over 30 years, said the first HR hire is “generally into organisations with a 40-plus headcount”.
Additionally, she pinpointed “absenteeism, staff attrition rates, an increase in disciplinary and performance management issues, and also multi site working” as key drivers behind HR take-up in SMEs.
Absenteeism, staff attrition rates, an increase in disciplinary and performance management issues, and also multi site working are key drivers behind HR take-up in SMEs
Although Anne prefers 40 as the magic number whereby a HR unit should be deployed in an SME, there was some conjecture between Anne and her peers as to when HR representation is necessary. The full discussion is listed below:
“From an external perspective, as a HR specialist agency, we would say that much will depend upon the individual organisation’s dynamics and the sector it operates in.
“There are specific factors that could trigger the need to consider recruiting a HR person. These prompts will include issues with absenteeism, staff attrition rates, an increase in disciplinary and performance management issues, and also multi site working.
“In our experience, we would suggest it is generally into organisations with a 40-plus headcount.”
Anne Corder, Anne Corder Recruitment
“SME's are often more in need of HR than almost all other businesses. Every employee is so important – often because they are revenue earners – therefore things like absence, grievance and staff turnover hit a business extremely hard.
“Two hundred employees seems to be the magic point where HR is formed. Businesses spend blood, sweat and tears developing pioneering business plans and crucially it’s the employees who deliver those plans, so why on earth would a company avoid investing in a robust HR function to get it right?
“But many company secretaries and FDs still see HR as a cost, and indeed many SMEs don’t hire-in HR, they train an internal recruit. More and more bureau HR companies are springing up, allowing HR services to be purchased in a ‘pay as you go’ basis.
“I'm always highly sceptical of a business where HR doesn't have a place around the boardroom table. Talent is the key to delivering business aspirations, therefore talent management is business critical.”
Tobin Murphy-Coles, Lorica
“There is no ‘one size fits all’ solution when it comes to HR, it will depend on the type of business and the complexity of its business structure.
“When the business involves labour-intensive activities and therefore requires manual workers and various layers of supervision and management, a company of 40 or 50 employees will already keep a HR professional busy enough.
“On the other hand a professional services organisation for example, such as an accountancy firm, could easily have 40 to 50 employees and manage the day-to-day HR issues with a well-trained administrator guided and supported by an experienced HR consultant that devices policies, procedures, manages performance when needed and deals with complex people issues.”
Mirtha Medina, HR Help 4 Business
“I would try and hold off until at least 200 people are reached. Till then, outsource if at all possible and simply do administration in-house. The challenge is that a small company will not attract or retain top HR talent and poor HR advice will frustrate the leadership team and fail to deliver expected benefits.”
Richard Alberg, MyWorkSearch
“The answer as to what point an SME needs an HR representative depends on the staffing profile. Essentially the questions is whether there is enough work to keep one person fully employed on a daily basis – does the business use temps, part timers, a lot of shift workers – all this determines the volume of work.
“However, with the raft of legislation and regulations surrounding employment, I’d advocate outsourcing or seeking regular input as soon as a single person is employed. In the current environment it is so easy for a small-business owner to unwittingly put himself at risk that seeking early advice is now a must.
“Only this week I met a person in the process of setting himself up in business financed by a cheque received from his previous employers. They did not follow the correct procedures when dismissing him so laying themselves open to a claim which they decided to settle out of court.
“Needless to say he had a very large smile on his face, all because his employers didn’t understand the risk they were exposing themselves to. I’m sure next time they will be seeking the appropriate advice. A salutary lesson for all small business owners.”
Rob Warlow, Business Loan Services
“It depends on the business, the people in it, the skills and experience of those people and the culture of the business. Many of our clients use our support even though they only have six members of staff, because they know they're fantastic at making widgets and not fantastic at managing people. Others wait until they either have no time left in the day for personnel matters or they have an incident which requires superior HR skill and knowledge.
“The first steps to identifying a correct answer to this question lie with the business and its senior management team. I don’t usually like to talk about boring paperwork but is there a necessity for contracts or a staff handbook with policies that make you think 'ah, I could do with some help there?'
“Do you have growth plans which would require a key understanding of HR to design a suitable strategy or an immediate recruitment drive which needs administering? Most MDs and senior managers think about sales, finance, operations and infrastructure; rarely do they think about the people who can execute it fluidly – your HR representative will.”
Claire Morley-Jones, hr 180
