Planning your Human Resource Assets
by Casey Woods, Executive Director | April 18, 2017
Small business owners often start with only one or two employees, and then they grow their businesses. Because of their humble beginnings, some entrepreneurs have a difficult time with human resources. If you are used to doing everything yourself, how do you change your allocation of time and focus when you bring someone new into the company? How do you grow when your time is already maxed out? What critical skills do you bring to the business, and what can be passed off to another individual? Small business people who realistically evaluate their own skill sets and then hire to allow for growth and diversification can find success. Here are some things you might want to keep in mind:
You have to actually lead your company- Leadership sometimes gets rolled into processes, roles or titles, but really means knowing where you are going and how to get there. This weekend, I took my three year old out to pick up some yard supplies in town, and the location we chose had small carts just for children. My child is a little head strong and very competitive (no idea where she gets that from) and she decided that she wanted to be in front with her cart as we searched for items to convert my swamp back into a yard. If I changed direction, she would state “Daddy! I want to lead!”, and I finally responded “Brynn, how can you lead if you have no idea where we are going?” In business, if you know where you are going, you can attract resources to get there. If you have no idea where you are going, then you are simply floating and your assets won’t be able to help.
Make a list of all the things you do- You might get a little exhausted after this list… Despite the public’s view of owning your own business as “glamorous” or “liberating“, small business owners are bookkeepers, marketers, janitors, merchandisers, buyers, pricing experts, repair experts, human resources and a thousand other jobs. Before you outsource something, you need to know what you are outsourcing.
Make another list of the things ONLY you can do- This is a little more difficult. Business people are only human, and sometimes they confuse what they like to do, with what only they can do. Take a step back and view yourself as an asset. What are those things that your skill set is best suited for? What makes your business the most money? What are those things that impact finances, confidentiality and achievement of vision that you must have a handle on?
Everything else is a duty you can potentially outsource to additional staff or a consultant-The difference between the “All the Things You Do” list and the “Things Only You Can Do” list represents an opportunity to outsource. If you design widgets for $80 an hour, but you take two hours out of your day to deliver widgets, isn’t it smarter to pay someone $10 an hour to deliver while you keep designing? If it takes you five hours to do something simple on your website, you might consider contracting web work out so others can implement technical solutions while you focus on other aspects of your business.
Calculate your payback- In sales, management often says that you have to sell five times your salary to pay for yourself. It sounds harsh, but staff have to pay for themselves in increased sales, increased productivity, or decreased expenses. Most organizations want staff, and most staff want consistent raises, but businesses and organizations must calculate the payback received on human resource investments over time. When you hire someone new, there is a training period, but if you don’t see improvements in metrics you may have to reevaluate your resource management.
Adjust your vision to the changing marketplace AND your talent- The marketplace rapidly evolves, and businesses must evolve with it. In development, we call this the “arrow of time”. The arrow always moves forward, so if your business or organization is constantly looking back twenty or thirty years to determine how you should progress, you’ve got some issues. You may hire individuals with skill sets that allow your company to grow and adapt to the marketplace. New directives that allow staff to showcase individual talents can create company loyalty and a more fulfilling workplace experience. However, don’t tie your company completely to one individual who could leave. If talent leads to additional profit, find ways to support that individual that may mitigate future losses.
Constantly evaluate and adjust to your needs and opportunities- In Main Street, we have an accountant. Staff look at invoices and aid in budget creation, but our checks are cut by an accounting firm that aids us in budgeting, reporting and financial decisions. At one time, many organizations had internal bookkeepers, or management would spend an inordinate time working through financial management. Deciding that staff time would be better spent on developing opportunities, the Main Street board decided to engage outside accounting expertise to streamline our managerial systems. The outsourcing was significantly less expensive than hiring a full time bookkeeper, and we have additional security in knowing we have professional partners overseeing a critical function of our organization. As technology improves, demographics shift and customer buying habits evolve, your business should be on the look out to attract or develop staff that can satisfy your ability to grow. NOT ALL OF YOUR HIRES WILL WORK OUT! Nobody is perfect, and we’ve all seen people that looked good “on paper” that felt the need to leave for hour long coffee breaks or claimed “boredom” when there were a thousand things to do at work. Consistent evaluation allows you to change staffing depending on what is right for you and your company.
Entrusting your business to someone new can be difficult, but limiting your growth has consequences for both you and your business. By establishing a list of needs and a solid plan for growth, you can find the right people to move your business forward.
Remember, if you need some help with internal business assessments, you have resources available. Contact Emporia Main Street for more information!