To add value and serve the needs of a company, the human resources department must be more than policy police and the group that organizes the company picnic. HR professionals contribute by playing a key role in staff planning, succession management and other strategic initiatives. There are significant consequences if HR is not in-step with business plans affecting the future direction of the company.
Without an action plan and the HR expertise to execute, the company risks exposure in staffing, productivity and employee morale. As a small-business owners, understanding the consequences of poor human resource management will help you avoid problems well in advance.
Planning and Staffing
Getting the right people in the right place at the right time requires advanced planning. HR must be in the business of analyzing business needs and projecting future workforce trends. This begins with projecting the skill levels the organization requires going forward versus the make-up of the current organization.
The next step, a gap analysis, reveals what types of employees the company requires and when to hire these individuals. Neglecting to forecast staffing management and succession planning are common consequences of poor HR planning and cause a delay in finding the right talent to fill key positions. In the meantime, both productivity and morale suffers.
Leveraging HR Technology
Recruiting top talent is only part of the picture, turning HR into a business profit center requires technology to manage processes and people. Software programs significantly enhance the ability to manage recruitment, compensation, benefits, performance management and training. Smarter technology can cut payroll costs and enhance project management. Technology increases expedient data collection, information flow, record-keeping and reporting. Planning pitfalls occur when HR fails to use technology tools for forecasting, efficiency and trending models.
Change and Engagement Issues
Managing change is a significant challenge for HR professionals in the best of times. There is a relationship between success and change management. It is vital to adequately plan for change. Another critical factor is a pre-planned and carefully crafted communications strategy. Employee disengagement is a product of poor HR planning and communication breakdowns.
Morale declines because employees feel confused, frustrated and sometimes betrayed. Eventually, retention becomes an issue if you don’t know what employees want – starting with knowing what job applicants wants, points out the American Society for Association Executives. When news of a disgruntled culture reaches the street, companies often lose the most talented individuals to competitors. Employees who remain often display complacency causing a further breakdown in productivity.
Performing Your Due Diligence
Minimizing risk is another responsibility of the HR department, points out executive search firm, The Christopher Group. Lawsuits and government fines can heavily affect the bottom line. By planning for and executing employment audits, HR can help reduce a company’s exposure. Without regularly scheduled internal audits, existing problems may go unchecked.
Neglecting to review hiring practices, discipline and termination procedures, pay practices and record-keeping is a risky omission. When government audits reveal areas of noncompliance, the consequences involve not only financial but also public relations exposure.