SMEs – HR FUNCTION, A REQUIREMENT OR AN UNNECESSARY COST?

Every business, from the 1-man employee micro-corner shop to the MNEs with tens of thousands of employees across borders can be said to run on certain building blocks ranging in number in consideration of the business size. These building blocks are typically the Support centres of every organisation, that assist the business to achieve its corporate objectives. The centres – most of which are often grouped as corporate services – could include departments like human resources, information technology, accounts & finance, customer relationship management, marketing & sales, corporate communication & branding, strategy, logistics, maintenance, and quite a host more. As you can imagine, some are more critical to certain organisations depending on the nature of the business that such an organisation performs. The logistics department for a shipping company perhaps rather than being support forms part of its core business, and likewise, the maintenance department could be very critical to for example an engineering company. However, these same departments only represent support to for example, a consulting or financial services company.

We shall commence a series on the primary support centres for any business, starting with Human Resources. Whether internal or external, HR is a key department of a company and a very critical component of any business regardless of the size of the enterprise. It helps in maximizing employees’ productivity and protecting the company from issues that may arise in the work environment.

How? HR plays a key role in developing, reinforcing and changing the culture of an organisation. Whether it is in the management of pay, performance, training and development, recruitment and onboarding and reinforcing the values of the business.

Common mistakes made by business owners especially Small Medium Enterprises (SMEs) is believing that they do not require HR Functions – either through HR personnel internally or outsourcing to an HR consultant externally. This is a great misconception because HR Goals are critical to empowering and motivating employees to perform optimally towards meeting corporate goals. The overall goal of HR is to help grow an enterprise, encourage employee engagement, and to play a key role in helping companies deal with various transitioning periods such as the current inclusion and diversity drive without a shutdown of operations. HR is involved both in strategic and comprehensive approaches to managing people, as well as the workplace culture and environment.

Running a business is never easy and ideally, it is not one person’s job, business owners need functional units or people to support the business on its growth trajectory – improving the organisation’s workforce by recommending processes, approaches and business solutions to management. Whilst we understand that cost – particularly in the leaner earlier years of business – will always be a consideration, we note and recommend that the Leaner strategy not get in the way of positioning your business for growth.

The HR Function is critical to any business, and outsourcing it provides a “Lean is Better” model without the loss of the function’s advantage in its entirety. As a matter of fact, with outsourcing, you are able to harness the experience of a professional at a fee that you can never pay such a professional as a full-time staff.

A contemporary belief regarding HR requirement is that it is typical for large organisations, as such, smaller enterprises have a widely accepted opinion that the HR function is not necessary and is an expensive cost they can do without. However, we forget that small businesses also experience increased competition like large organisations, therefore there is a need for better understanding and management of all available resources and support in functions that drive those resources to operate optimally.

Spread the love

Leave a Comment

Your email address will not be published. Required fields are marked *