How Smart Companies Streamline Their HR

For the past twenty years, we’ve helped more than 250 businesses and organizations with Human Resources. We’ve learned a thing or two about what works and what doesn’t.

Regardless of company size, what they all have in common is that the HR function can be more streamlined. We’re not talking about cutting staff. It’s about maximizing available “resources” so you can maximize this critical business function.

Here are 4 steps we recommend to make your workforce more productive, engaged and aligned. (Hint: it’s not as hard as you might think!)

1. Maximize HR Technology

Most small and mid-sized businesses don’t have a HR Management System (HRMS). That’s amazing to us. Almost all the major payroll companies offer this program at low prices. There is not one thing you can do to better streamline HR than this.

In 2020, we helped four businesses install an HRMS. Within three months, the average HR administrator saved 45 hours per month! (Company size averaged 60 employees)

Venture capitalists invested $7 billion in HR technology companies in the past two years. It’s only going to get bigger and better for every business.

2. Who Does What (aka the right person for the right job)?

If you have a full-time HR person, ask them, “what do you spend your typical day doing?” If it’s administrative, then the HRMS in #1 will reduce their workload by about 25-40%. So NOW what do they do all day?

An accredited HR professional probably works with you on employee performance issues. They also explore ways to increase employee engagement and return-to-office issues. Most also support the talent acquisition process. But in a small business, how many hours a week does that really take?

Is your “HR person” an “HR person”, or is that a side gig for the office manager or bookkeeper who doesn’t have an HR background? If you have a General Counsel, do they have an employment law background?

In 2003, the ratio of HR professionals to employees was 1:40. Today, it’s about 1:150.

Companies are discovering technology and targeted outsourcing can replace a full-time HR person. At the same time, the employees doing that work can return to their true area of expertise.

Do a gap analysis (or have an expert do one for you). Find out what you have and what you’re missing. You should find a cost-effective HR program which increases capabilities and decreases worries.

3. Get Experts and Let Them Make the Decisions

Everyone thinks they know something about HR. And most of them don’t, plain and simple.

If you have a Board, don’t get them involved in reviewing Job Descriptions (this happened to us last week).

Titles mean nothing today. We saw an applicant earlier this year who was a “Director of Human Resources”. Upon review, the company she worked for had eleven employees. And her “HR function” was collecting applications and processing payroll. It’s not about the title, it’s about the expertise. You don’t want someone like that making decisions that impact your business.

When it comes to HR, consolidate decision making processes to one or two people. The more people you talk to, the more different opinions you’re going to get. Meaning decisions will never get made. Last year, a non-profit client had six executives approve their employee handbook. It took them (and us) 23 drafts and six months to deliver a document. A document that was already legally reviewed and ready-to-go.

Know who the experts are and use them. You don’t have to hire full-time people to get this level of expertise.

4. Strategically Use Your Employment Attorney

In smaller companies, the de facto HR answer machine is often the employment attorney. (When in doubt, let’s call…). But that can be  expensive, as most employment attorneys charge between $500-$1,000 per hour.

Certified HR consultants, however, charge less than half that and can provide answers to 80-90% of questions.

Save the employment attorney for lawsuits and questions which are legal in nature.

In fairness, we love employment attorneys. They do things we cannot do, and we do things they generally don’t want to do. Most employment attorneys want to be defending you in court. They don’t want to answer questions such as “how long do I have to keep this employment application on file?”

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