Whilst employment law has changed markedly from 10 years ago when Beststart launched, the need for organisations with 50 or more employees to introduce a retained HR Consultancy has remained constant.
To help explain why, we outline the changes a company goes through during its growth phase. At each stage of development there is a fundamental shift in the way the organisation has to manage its people in order to prosper and grow. This is not to say that an organisation has to have HR but failure to give due consideration to the Human Resource Management function can lead to devastating consequences.
The more rapid the growth, the more challenging it becomes to control the operational performance of your organisation. With the right HR Consultancy in place, an organisation can reduce risk and improve its bottom line performance – both essential ingredients to deliver stakeholder and customer value.
The Early Stages of Start-up:
Typically, an organisation can get away without the need for retained HR. Often the business will be formed from an idea and staffed by family and/or friends who trust one another implicitly. For the main part, they can work in harmony to achieve their ambitions.
5 to 10 employees:
However, as time passes and the business increases in size, the organisation has to look further afield to recruit the skills it needs. This is challenging enough but as employees are drawn from beyond the ’original circle’, issues of trust, responsibility and control can increase. Therefore, the need for a solid foundation and HR processes, including contracts of employment and a company handbook, become important.
10+ to 25 employees:
Employee challenges become greater as the organisation’s structure starts to take shape. The need to clarify roles and responsibilities come into sharper focus as a team’s and an individual’s performance begins to be critically evaluated. Typically, the Financial Director (FD) finds the HR function falling under their remit and they normally seek external support to ensure the right processes are followed and outcomes achieved. While a telephone helpline and manual are often seen as a quick fix, the implications for an organisation, especially those that are evolving, can be costly as we explain below.
25+ to 50 employees:
When an organisation reaches 25+ employees questions start to arise around the recruitment and retention of staff, employee career frameworks, and pay and reward. This cannot be directly dealt with through a phone call and indexed file. As teams become larger and more complex, mechanisms for feedback and control need to be put in place to ensure efficient information flow. Employee expectations are greater, and it’s not unusual for the Board to start questioning staff as well as their own capability. This combined with the daily increase in HR issues and the ability for the FD and Managers to effectively deal with them, in both a timely and fair manner, means that some form of retained external HR support should be considered.
Organisations with 50 or more employees:
You may already have employed a HR Consultancy? Deeper questions are asked around the values and culture of the organisation. Can existing suppliers support you as well as they used to? Do they lack the skill or expertise? More emphasis than ever is placed on the strategic direction of the organisation. Matters of succession planning, recruitment and talent management and retention, as well as the need for feedback mechanisms in the form of staff engagement and welfare surveys become increasingly critical to your future success. Being able to motivate and maintain morale requires skill and careful planning, enabling Managers to get the best out of their teams as well as their own performance.
Signs you should start thinking about using retained HR Consultancy:
- Spending more time dealing with people issues than growing your business.
- Feeling isolated and alone. Your Managers are spending more time in meetings than directing and doing their job.
- Staff feel they are not listened to and you notice a drop in morale.
- An increase in sickness absence, whether management’s or staff’s, and stress levels are increasingly a concern as people appear to be unable to deal with their daily work. Productivity levels are falling and for no obvious reason.
- Customer satisfaction is being affected despite your best efforts to put operational systems and practices in place.
- Talented staff leave, possibly taking up new roles in your competitors. Offering additional pay/bonus no longer works and falls outside your agreed pay scale limits.
- Struggling to attract the right talent and leadership to the organisation because your recruitment process keeps failing to identify the right people.
- Spending more time worrying at night and the weekends about how you are going to hold the business together than thinking about those sectors and services you wish to grow.
- The person/people in charge of HR no longer have the technical capability or breadth of skillset to deal with more complex HR issues. They are struggling to manage the function despite their best effort.
- Being forced to jump through hoops and it takes too long to resolve the simplest of staff issues. Your legal costs are escalating for advice on more complex HR matters.