HR and the SME

Most SME’s that employ staff will be breathing a sigh of relief at this time of the year, having got through the process of issuing payment summaries, reconciling the payroll, reconciling PAYGW payments and reporting to the ATO. Box ticked, and don’t have to worry till next year - but payroll is not the only consideration you have as an employer. A new financial year, with payroll queries out of the way, can be an opportune time to have a review of your Human Resource (HR) plans and policies and get organised for the New Year. As an SME owner we know you have many hats, and HR is definitely an important one, that often gets shelved or put in the too hard basket.

Many businesses face the same situation - people are one of the biggest costs and usually present one of the biggest challenges - whether it is finding the right person for the job, through to managing existing staff and  their motivations.  Many SME’s tend to have a reactive attitude to HR, only dealing with it when they are forced to, and as a result can be missing key elements that will cause less headaches, and even a positive outcome in productivity in the long run.

A few examples of ideas SME owners may have towards HR:
  • it doesn’t really apply to me, I only employ a couple of people
  • all that HR mumbo jumbo is for the big companies that have a HR person
  • employment contracts aren’t necessary, everyone here knows where they stand
  • I can decide what I pay my staff, we are too small to cause any industrial relations issues
  • my business is new so I have an excuse for working things out as I go along.

If any of the above resonate then you probably need to review your HR plan, and not to pander to the employees or even just to comply (though it is important you do), but because it makes good business sense. When you consider the portion of your business expense/investment that is in people, why aren’t they a priority of your time?  This does not have to be complicated, we list below six easy steps to get you on the way to ensuring you are compliant, and bolstering one of your most important business resources.

  1. Draw a simple company chart mapping out your current people and any you might need. This should morph into an organisation chart that gets updated regularly, they are a good tool for assisting with your business planning and budgeting as well.
     
  2. Do you have any employment contracts in place? If yes, you are ahead of the game, though it may be worth having a look at the fair work website to ensure they are compliant. If not, finding a simple template on the fair work website and adapting it to your business is easy and worthwhile. www.fairwork.gov.au This website is a treasure trove of templates and information that is relatively easy to navigate and decipher. There are also options for outsourced HR services, that may be worth investing in if you have complex issues in your industry or quite a few employees.
     
  3. Make sure you understand the different employment situations you are able to enter into and what suits your business needs – casual, part-time, fulltime. It is about realising what suits your business then setting it up and recruiting appropriately.
     
  4. Make sure you have a copy of the Fair Work Information Statement and that you give it to new employees as part of them commencing work with you, whether they are casual, part-time or full-time. This is a minimum requirement when you employ someone. You can download it here http://www.fairwork.gov.au/Employee-entitlements/National-Employment-Standards/fair-work-information-statement.

  5. Job descriptions – these do not have to be exhaustive but can really assist in ensuring employees are clear about what is expected from them and what they are supposed to be doing. Thinking through these and writing them can also assist you as a business owner clarifying what you need and how it is delivered in terms of your resources.  
     
  6. Communication. This should always be forefront of your mind when dealing with employees, from when they commence right through your business relationship with them. Ensuring you have a HR/employee policy, either as part of the contract of employment or an addendum to it, can really help get things off on the right track, covering standard HR information like probation, leave and other expectations, that you may think are obvious but that should be laid out in a clear and straightforward manner. In regards to existing and ongoing  Making time to review employees and give them feedback can be a powerful tool to ensuring you are nurturing your investment in that person and picking up if there are any issues that may need to be addressed.

All of the above steps are about focusing on your business and the important resource of people. Replacing employees is costly from a time and money perspective – investing little amounts of time all of the time is less costly and far more effective.

Azure Group Wealth Investment Update - August 2014
Small Business Concessions changes

About Author

Karin Darcy
Karin Darcy

Karin Darcy is an experienced finance and operations professional that is passionate about working closely with SME business owners to help them achieve their business goals by introducing innovative solutions to their accounting function.

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