Human Resources Planning - Accion Opportunity Fund
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Human Resources Planning

Here are the best human resources strategies, hiring practices, and management tips for small business owners.


When you’re running a small business with a small team, every person you hire matters. Every player needs to function as part of the team. Big companies with hundreds of employees have entire human resources departments dedicated to finding the right people. When you’re leading a small team, on the other hand, you’re the whole human resources department. You can’t afford to have dead weight, personality conflicts, or attitude problems – you have a business to run!

Hiring and managing a small group of employees isn’t always easy. Here’s what you need to know about human resources planning.


Hiring A New Employee

Your business is growing and you can’t do everything yourself. That means it’s time to take on a new employee (or even a couple). That’s stressful – you’ve built this business and it’s hard to trust someone else to help you take care of it. How can you make sure to make the right hire?

  1. Don’t rush. Take the time to put out job postings on a variety of platforms and interview a number of candidates. Human resources planning takes time and you don’t want to be stuck making a snap hiring decision.
  2. Know what you’re looking for, but keep an open mind. Does this employee need to have a specific skill set? For example, do you need someone who knows how to cook or how to keep the books? Make sure your job postings are clear and all of your candidates meet those basic criteria. At the same time, keep an open mind about what each candidate can bring to your team.
  3. Network. It’s good for your business in general as you make connections with other people in the community, but it’s also a good way to find candidates to work for you. If you stay connected to the business community, you may have an ideal candidate in mind before the job even opens up. With a roster of potential candidates, you also have the flexibility to create positions for those you’d like to have on your team.
  4. Interview thoroughly. You’ll want to make sure the candidate can do the job – you may even want a demonstration of their skills – but that’s only part of the interview process. You’re also looking for a good “fit.” A new business can be a tough place to work – you’ll want a candidate with a positive outlook and a can-do attitude. Does the candidate share the values and vision of your business? Try to listen more than you talk – really pay attention to learning about who this person is and what they’re all about. Ask them what they can bring to the table.
  5. Check references. Call the candidate’s previous employers and ask about their performance, their attitude, and anything else you might need to know before making a hiring decision. You’ll want to make sure that the candidate was being honest in the interview.
  6. Check-in with your other employees. On a small team, everyone has to work closely. Invite any existing employees to meet the potential new hire to make sure everyone will be able to get along. The decision is ultimately yours, but you don’t want to introduce conflict into your workplace if you can avoid it. Your employees also have different points of view and may be able to give you useful insights about the candidate.
  7. Think long-term. Is this an employee to fill a temporary gap or is this someone you want to work with for the long haul? Consider the candidate’s growth potential – will they be able to pick up new skills and take on new responsibilities as your business grows? This isn’t just hiring, it’s human resources planning – you’re investing in an employee as an asset to your business.
  8. Make your job offer clear and fair. When you’ve decided who you want to hire, make sure that the job offer explains the terms and expectations of the position. Make sure that your salary and benefit offers match the market – you don’t want to lose a strong candidate because your competitors are offering better pay.

How To Deal With Employee Problems

Even with the best human resources planning and the best hiring practices, sometimes an employee will cause problems. In a big company, that may result in immediate firing. In a small business where you all work closely together, that’s not usually the best option. Instead, you can take steps to defuse the situation and help bring the employee back into line.

First, take the time to speak to that employee privately to talk about what’s going on. Rather than starting with accusations, ask them calmly and openly about what’s going on. At this point, you need to show that you care about the employee, not that you’re angry. It’s possible that this person is having serious issues with their personal life or a health issue, for example, and talking about it openly can give you the opportunity to discuss how it affects their life and work. Then you can start talking about potential solutions.

If the employee doesn’t want to talk about that, you may need to address the issue more directly. When you do, be sure to focus on specific behaviors and actions rather than attitudes. It’s called the Camera Check technique – you only address things that would show up on camera. For example, you might say to the employee, “I see you’ve been late and had an argument.” This is much easier to hear than “you have a poor attitude.” This method takes the negative spin out of your feedback and turns into behavior that can be corrected, rather than an attack on their character. Then, explain what you need in concrete terms. For example, you might say, “I need you to finish your projects by the deadline each Friday.” That’s something your employee can strive to make happen and it’s more likely to get a positive response than, “I need you to work harder and have a better attitude.”

If the problems continue despite your best efforts, you may suggest a probationary period. That puts the employee on notice that their behavior needs to change or they won’t be able to continue in their position. Hopefully, that’s enough motivation to improve.

Unfortunately, sometimes an employee just isn’t a good fit for your company. That puts a very difficult decision into your hands. Once you’ve made every attempt to address the employee’s needs and behaviors, however, you may need to fire someone. If that’s the case, plan out what you’re going to say ahead of time. Decide whether you’ll be offering severance pay and how you’ll be tying up any loose ends. Be calm and respectful, but assertive. You don’t need to offer detailed explanations for your decision – just keep your cool.


Keeping The Peace

Of course, the best option is to avoid employee problems before they happen. That means keeping close contact with your employees and paying attention to their needs as individuals. Make time to talk to each of your employees individually. Ask how they’re doing and how their jobs are going. Ask what you can do to help them. Make sure they have the tools they need to do a good job for you. That way, your employees feel like they can trust you and they’ll want to work hard for you.

You may consider having weekly meetings to give everyone a chance to bring up important issues and to praise people for their hard work. When you have a big win – a large contract, a successful product launch, a major milestone – be sure to celebrate with your employees. Let them know how important they are to you and to your business. When you have a big loss, bring everyone together to talk about constructive ways to overcome the challenge – don’t let it turn into the blame game.

You and your employees are in this together, so make sure that they feel that way, too. Human resources management isn’t just about hiring and firing – it’s about the people that come to work for you every day.


Protect Your Business

As a small business owner, your success depends in part on your employees. Of course, managing people is tough – especially when it’s a small group that has to work closely together. One way to maintain harmony is to be thoughtful about whom you hire. Another is to create an employee manual or handbook. In it, you can describe the roles and privileges of your employees. That way there are no surprises about your expectations and each employee knows that she is subject to the same expectations as every other employee.

Your employee manual may also include procedures for dealing with the problems that inevitably arise among groups of people. For example, you can list ways for your employees to bring up their concerns about their jobs or other employees with you in a structured and safe way. You can also explain how you’ll deal with any problems that arise so that the procedure is transparent and fair.

If you do have to address a problem with an employee, it’s crucial that you keep complete documentation of every incident and every discussion you have with the employee. Unfortunately, disgruntled ex-employees may attempt to sue you for firing them and you’ll need that documentation to prove that the termination wasn’t discriminatory or inappropriate.


The Bottom Line

Hiring, firing, and general human resources management is all part of doing business. As a small business owner, it’s up to you to hire the best candidates and keep your team working together smoothly.

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