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A brand new HR for SMEs  (View Comments)

Narayan Krishnaswamy

Posted On Tuesday, February 02, 2010 at 12:43:13 PM

While the standard menu of HR services may apply and well work for large organisations, there is a clear need for a bespoke and custom-made HR solution for SMEs.

Why a different solution for SMEs?

That SMEs and growth organisations are substantially different from large and mature organizations is widely accepted but here is a partial summary on what makes them different.

1.They ooze innovation and are doing interesting work trying to address untapped opportunities in a profitable manner.
2.Small organisations are pre occupied with getting a large variety of things done in very brief periods of time.
3.They are focused on things that are mission critical and expend almost all of their energy on them.
4.They are looking at optimising costs and getting the most out of every penny spent.
5.They are mostly CEO led and he has a lot of things to worry about - market, offerings, investors, breakeven, profitability, equity, exits and so on6.They have a rhythm and culture of their own.

In such an environment, SMEs are quick to dismiss standard HR speak and, by extension, standard HR offerings.
Ask any CEO of an SME what the core of his business is and right at the top he is sure to mention people capability as one of the drivers that will decide the future course that his business takes.

Yet, HR in a standard shape and size does not meet with his approval.
 

An engagement model
 

1.Arrive at a working definition of HR: It is necessary for SMEs to arrive at what HR means for them from an immediate perspective. It may be worthwhile to articulate challenges that are faced by the business from a people perspective and then plan appropriate strategy around that.
2. Another business might say ‘Key staff need to have skin in the game and hence equity in the company.’ While yet another might say, ‘I need to attract world-class talent, period. The rest can wait.’ Once the definition is complete, it is just a matter of delivering it and making additions and deletions to scope as necessary.
 

HR department vs. HR capability: The DIY way

Small businesses often think of HR capability and HR Departments as a synonymously big problem. Fact is that they need capability for sure, but do they really need an HR Department?
 

Is it therefore possible that all staff members are equipped with HR capability such that HR, or a portion of it, happens on a DIY mode?  Surely all the administrative tasks - leave administration, salary, notification of holidays, administering surveys etc do not need a person. There is an abundant supply of technology available these days to get it all done by hitting a button.
 

Small businesses need central HR capability that works closely with the CEO and brings the people part of the business vision to life. This part of HR lies at the very core of HR imperatives within the business. Delivering HR can be achieved by a combination of implementing a cost effective people system and training all staff to manage their own HR, not to mention extremely low costs.
 

3.Outsource to the specialists: There are firms out there that specialize in providing people capability to SMEs and have a whole host of wares that are specifically built with SME needs in mind.  Giving them a call may be a good idea.

In conclusion, there is a case for a brand new HR that SMEs can make use of and benefit from…an HR that architects itself around diverse business needs, one that comes at a fantastic price, leverages technology and is successful at finding the hidden music and resonance within organisations and orchestrating success.

The author is co-founder & CEO of Talking Heads, an HR solutions company that focuses specifically on HR needs of SMEs

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