Category: Beyond Leadership

TriNet, a California based HR Services provider, conducted a survey of small businesses in 2014. They found that:

• 81% of small business owners manage the HR function themselves
• 30% admitted that they were nervous about managing HR for their organization
• 30% reported that they improperly paid employees
• 23% acknowledged that they lost employees to their competitors due to benefits

According to the U.S. Census Bureau, there are over 137,000 new employer companies starting up each month. As those companies grow, their burdens as an employer increase. Many of the managers who responded to the TriNet survey stated that they spent approximately three to ten hours per month on processing payroll taxes. That doesn’t even account for all of the other HR responsibilities they manage. The more time they spend managing HR, the less time they have available to focus on growing their organization.

What can small businesses gain by turning their HR functions over to a trained HR professional?

1. Compliance. An HR professional will evaluate the organization’s HR policies and procedures to ensure that they are compliant, meet best practice standards, and truly work in the best interest of the organization and the employees. By ensuring that the organization is compliant, a small business can help to minimize employment liabilities.
2. Recruitment. HR can assist the organization with recruitment efforts, streamlining procedures to be more efficient, cost-effective, and to help ensure that the organization is hiring the best candidates for the position and the company culture. They can also assist with how those candidates are integrated into the organization, from onboarding to training, to performance management.
3. Training. While orienting employees to the organization is one aspect of training that HR often has a huge hand in, training goes well beyond that initial introductory period. HR is often an integral part of designing training programs within an organization. They not only help design training but work to evaluate the effectiveness of the training, as well as determine additional areas of need. They also work closely with management teams to provide invaluable leadership training.
4. Strategic Planning. The role of HR has evolved immensely over the past few decades. It has moved from an administrative role to a strategic role. In most organizations, both small and large, HR now has a seat at the table. Many organizations look to their HR departments to help strategize and plan for the organization’s future. HR plays an important role in the stability and growth of the organization. Organizations look to HR to fill four vital roles: the administrative expert, the employee champion, the strategic partner, and the change manager.

How can a small business justify the cost and what will be their return on that investment?

By building a strategic partnership with HR, organizations can help to determine how to most effectively use the financial resources allotted towards HR functions including:

• Wage structure and benefits offered
• Utilizing cost-effective HR systems
• Increasing employee morale and retention
• Safety/Risk Management mitigation

While adding HR to your small business will mean finding the financial resources to do so, the cost of not adding HR to your organization could be much more substantial.

Do the benefits of adding HR to your small business outweigh the risks?

How often as leaders do you wish you could convince an employee to stay after they’ve turned in their resignation? What if you could change their mind before they reached the point of no return?

Organizations often sit down with employees after they’ve tendered their resignation to find out why they decided to leave. But how often do leaders sit down with employees to find out what can be done to ensure that they stay with the organization?

Exit interviews usually consist of questions surrounding the reason for leaving including dissatisfaction with leadership, the organization, and benefits offered. But by the time leadership sits down with an employee to conduct an exit interview, the employee has already checked out. While in many cases the employee will be forthcoming with information on why they’ve chosen to leave, often times the employee no longer cares about providing their honest feedback. The damage has already been done and they’re ready to move on. While information gathered in the exit interview can be helpful in making necessary changes in the organization for current and future employees, it won’t help with the loss of the employee being interviewed.

In an interview with Forbes Magazine, Richard Finnegan, author of The Stay Interview, said “Hard data proves the top reason employees quit is they don’t trust their managers. Stay Interviews are the absolute best trust-building activity…and therefore the best retention tool.”

So how do stay interviews differ from exit interviews, other than the obvious fact of when they are conducted?

• Stay interviews focus on the positive. What do employees like about their job? What makes them want to come to work each day? What do they like about their leadership? Where do they see themselves going within the organization? What areas of the organization do they feel they can make a bigger impact in?
• They allow leadership to focus on the individual. Exit interviews focus on the company overall, from the leadership team, to benefits offered, to company culture. Stay interviews allow managers to focus on the individual employee. What drives them to be successful in their role? What are their career aspirations within the organization? How can leadership help them to reach (or exceed) their goals by helping them continue to grow their knowledge, skills, and abilities (KSAs)? What KSAs do they have that are not being fully utilized by the organization?
• It helps to build trust with leadership. As Richard Finnegan said, most employees choose to leave because of a lack of trust with their leadership. Often this lack of trust stems from a lack of communication between employees and their managers. While many managers have conversations with their employees, those conversations are often limited to passing in the hall, quick catch ups on tasks assigned, and performance counseling. Performance reviews are usually conducted annually and too often focus on past shortfalls in performance and what the manager wants to see in future performance. Many performance review structures don’t allow for employee input in goal setting, which greatly affects employee buy in. By conducting stay interviews, the employee is given the opportunity to discuss what drives them, what their career goals are, what they feel their strengths and weaknesses are, and what areas they’d like to improve on.
• They can help predict future turnover. Stay interviews can help leadership pinpoint those employees who are happy in the organization and those who are not. By determining which employees are at a higher risk for leaving the organization, leadership creates an opportunity to improve the individual morale of those employees. It may also help leadership to determine if it’s too late to make an impact on an employee’s view of the organization. At which point, leadership may begin to look at succession planning for that position in preparation of a potential resignation.

What impact would stay interviews have for your organization?