SMEs have particular challenges that are unknown in the corporate world: budgets are often tighter, revenue less specific and lines of credit harder to come by. On an organizational level, too, resources and skills that would have been available in-house in larger companies are usually just not there. This means that small business managers need to be smart when it comes to HR issues.
Compile an Employee Manual
This may seem like a waste of time if you're employing less than a dozen people, but take a moment to think about how you are actually making your expectations and procedures for new hires.
Good communication lies at the heart of good management, so don't wait until somebody colors outside the lines before informing them of how things are done. Additionally, requiring employees to read the manual can protect you in case of a dispute arising. Several good templates are available online.
Check Out Outsourced Payroll Services
It may seem like Management 101 that employees expect to be paid on time and in full, yet some small businesses manage to fall down on this hurdle. Cashflow problems may be the culprit sometimes, but the surprising fact is that the reason is more often haphazard administration.
If you're still using a desk calculator or a spreadsheet to calculate who should receive what at the end of the month, you're not only wasting valuable time but also running the risk of committing a tax filing violation. Outsourcing payroll is likely to be cost-effective over the long run, especially if the dollar amount each employee receives varies from month to month. On a related note, installing an electronic time and attendance (clock in/out) system not only streamlines wage calculations but may also increase productivity.
Put an HR Consultant or Lawyer on Retainer
You have insurance, right? In principle, you pay a little each month so that should the worst happen, you don't have to pay a lot. Contracting a professional HR firm allows you to avoid costly errors when it comes to lawsuits regarding wrongful termination, harassment, discrimination, confidentiality issues and much more. Anybody can give you advice, but it's very much worth it to make sure what they tell you is accurate and up to date.
Be Creative with Incentives
Every small enterprise needs the best talent they can possibly attract but can't offer quite the same perquisites and salaries that larger competitors can. In this regard, it's useful to remember that real value is in the eye of the beholder.
If catered lunches are far beyond what the budget can bear, then have an employee picnic in the park instead. Health insurance is ridiculously expensive, but online psychologist services and individual primary care packages are available for a relatively inexpensive flat monthly fee.
The critical thing to keep in mind is that employees want to feel that the company cares about them, so supporting their life outside of work with sponsored gym memberships and childcare may be more attractive than just offering them more money.
Frequent Evaluation and Feedback
While salary is apparently essential, a person's enjoyment of their work, how well they get along with colleagues and supervisors and their career development usually plays an even more significant role in employee retention. Regular feedback sessions, in which both employees and management can air their views and concerns, helps in creating a more positive working environment and addresses issues before they can become problematic. These meetings can also be used to define goals and expectations, and best of all cost nothing but time.