In most organizations, human resources is the department within the organization that supports your most valuable resource: all things “human.” Companies with fewer than fifty employees frequently delegate this to the Controller, Office Manager, or whichever manager says, “Yes, I’m good with people.” In this type of situation, “HR” usually means the person who takes care of the required paperwork for employees.
If we agree that the most expensive, complicated to find, and difficult to replace resource is your people, why don’t most entrepreneurs make human resources more of a priority? I believe it’s because most leaders think they’re not good at HR and are afraid they’ll make mistakes, possibly costly ones. Sometimes they’re afraid of being sued, sometimes that they don’t know how to manage people, sometimes of conflict, and generally (like most people) of what they don’t know. But I recommend that you make “human resources” one of your top priorities as a CEO. Don’t let this one just fall into someone’s lap. Intentionally find your most skilled and knowledgeable “people” person to be in charge of HR. Otherwise, you might just find out why there are so many good employment attorneys in practice.
Once your company gets to a certain size (usually at about fifty to seventy-five people), and depending on the nature of your business, you’ll need a full-time HR professional. Up to that point, the duty can be shared with another position, but it’s always advisable to enlist outside help in addition to your internal person. Following are some of the issues, including an employee handbook, that your HR person or team will want to consider to keep your employees satisfied and your company productive.
Once you’ve designated the lead for your HR functions, it’s important that you’re both clear on what that person will be responsible for in that role. Following is a list of some of the duties your HR head is likely to be in charge of:
- Job descriptions
- Salary ranges
- Company policies
- Benefits contact
- Company morale
This is just a short list of possible duties of the HR professional in your company. Just be clear about that person’s level of authority—where it begins and ends—and what the responsibilities of the position are.
In most companies too small for a full-time HR professional, these duties will likely be shared amongst several executives or managers. Be sure to match duties to both skills and personalities. For example, if you have an intuitive manager who is particularly good at reading people, put that person on the interviewing team. (On the other hand, having someone on your HR team who enjoys firing people will most likely lead to lawsuits. In HR, regardless of wrongdoing, you will always have to prove you were not at fault, and doing so will most often be expensive.) Because people like to be involved in the decisions that directly affect them, make sure you have different departments represented including the one where the position is open. However, be clear about the authority you grant these individuals. Are you asking for input or a decision? Not making this type of expectation clear from the outset could leave your people feeling that their input was not heard or valued.
Excerpted from my book, “Putting Together the Entrepreneurial Puzzle: The Ten Pieces Every Business Needs to Succeed.” Available here on Amazon.