The Importance of the People Process in Small-to-Medium Businesses: Creating a Strategic Human Resources Management Plan.

BY: DOUG VERLEY.

Executive Summary.

In small-to-medium businesses (SMBs), the people process, often referred to as human resources, plays a pivotal role in achieving success. A well-structured Strategic Human Resources Management (SHRM) plan is essential for attracting, retaining, and developing a talented workforce that can drive the business forward. In this article I will explore the significance of the people process in SMBs and provide insights on how to create an effective SHRM plan. We will also delve into key areas of focus, measurable outcomes, and recommended initiatives that can help SMB leaders maximise the potential of their human resources.

The Importance of the People Process in SMBs.

The people process, or human resources, is the backbone of any organisation. In SMBs, where resources are often limited, the strategic management of human capital becomes even more critical. Here are a few reasons why the people process is of utmost importance in SMBs:

1.      Talent Acquisition and Retention: In SMBs, each employee's contribution can significantly impact the business. Attracting and retaining the right talent is vital for sustained growth and success.

2.      Organisational Culture: Building a positive and effective company culture is crucial in SMBs to foster innovation, productivity, and employee satisfaction.

3.      Compliance and Risk Management: Ensuring legal compliance, managing HR-related risks, and maintaining a safe work environment are essential in SMBs to avoid costly legal issues.

4.      Achieving Owner-Manager’s Personal Objectives: Most people that start their own family-owned business do so for life-style purposes. However, in practice most family-owned business owner-managers work far too hard, assume too much work pressure and stress, and have a compromised work-life balance and life-style. Employment of capable and willing people, and a sound SHRM Plan can afford the owner-manager(s) a better work-life balance and improved life-style.

Creating a Strategic Human Resources Management Plan.

To harness the potential of your human resources, you should establish a well-defined SHRM plan. Here's how to create one:

1. Assess the Current State: Begin by conducting a thorough assessment of your current HR processes, including recruitment, performance management, training, and compliance.

2. Set Clear Objectives: Define your HR strategic objectives, which may include reducing staff turnover, increasing employee engagement, or enhancing leadership development.

3. Identify Key Focus Areas: Determine which HR areas need attention. Common focus areas include talent acquisition, training and development, performance management, reward system, and succession planning.

4. Develop Measurable Outcomes: Identify key performance indicators (KPIs) to track the success of your HR initiatives. For example, if your objective is to reduce staff turnover, measure the turnover rate before and after implementing your plan.

5. Design and Implement Initiatives: Develop specific initiatives tailored to address your focus areas and achieve your objectives. For example, for talent acquisition, you might implement a more effective recruitment process.

6. Monitor Progress: Regularly review and adjust your HR plan as needed. Ensure that it aligns with your overall business strategy and adapts to changing circumstances. I would strongly encourage team involvement using carefully crafted employee/team surveys.

Key Human Resource Strategic Objectives.

Your HR strategic objectives should align with your overall business goals. Here are some examples:

1.      Reducing Turnover: Implement initiatives to improve employee engagement, provide career development opportunities, and enhance the work environment.

2.      Enhancing Employee Productivity: Invest in training and development programs, performance management, and feedback mechanisms to help employees reach their full potential.

3.      Succession Planning: Identify and develop future leaders within the organisation to ensure a smooth transition when key personnel leave or retire.

4.      Creating a Positive Company Culture: Establish a workplace that promotes collaboration, inclusivity, and a strong sense of purpose.

5.      Encourage High Performance & Autonomy: A key ‘Bug-Bear’of mine – don’t seek to employ the right people, develop, and support them, and then Mico-Manage them. This will kill individual and team enthusiasm and trust. What you will achieve is that your best people will leave first!

Conclusion and Recommendations.

The people process is the lifeblood of SMBs, and a well-crafted SHRM plan can be the key to unlocking your organisation's full potential. To achieve success in your HR management, follow these recommendations:

1.      Assess Your Current HR Situation: Start by understanding your current HR strengths and weaknesses.

2.      Define Clear HR Objectives: Determine what you want to achieve through your SHRM plan.

3.      Focus on Key Areas: Identify the specific HR areas that need attention.

4.      Establish Measurable Outcomes: Define KPIs to track the effectiveness of your HR initiatives.

5.      Implement Initiatives: Develop and execute initiatives to address your focus areas.

6.      Invest in People Development and Training: Ensure that your team are constantly learning and developing, and that they are afforded every opportunity applicable to the business’ needs.

7.      Reward Performance: Implement generous performance and reward initiatives that seek to excite team members, drive performance, and afford ‘uncapped’ performance rewards.

8.      Empower and Trust: Do not micro-manage. If you’ve employed highly skilled and driven adults, treat them as such, and get out of their way.

9.      Monitor and Adapt: Regularly review your HR plan and make adjustments as needed to ensure alignment with your business strategy.

To get started on creating an effective SHRM plan tailored to your SMB, or for assistance in optimising your people processes, don't hesitate to contact me, Doug Verley, at 0405 122 345. Your journey to strategic HR management begins with the right plan and the right support, and I'm here to help you achieve success in this crucial aspect of your business.

Call or email me.

If you’re a Small-to-Medium Business Leader, or a Bold & Innovative Start-Up / Early-Stage Entrepreneur, and you are genuinely committed to achieving your desired work-life goals, and significant breakthroughs, then I invite you to please contact me - Introductory phone and/or email communication is FREE with no obligation.

DOUG VERLEY

Business & Life Coach, Business Advisor & Strategist

doug@DougVerley.Com

0405 122 345

Remember – “Good fortune & happiness favours the well-informed”.