04 Jan Human Resource Management in New Enterprises
It has often been said that employees are a company’s greatest asset. This is rightly echoed in the words of Sir Richard Branson, “Train people well enough so they can leave, treat them well enough so they don’t want to.”
So, the key to a successful business is training employees and retaining them? You bet!
Basically, the HR. Right?
Err…yes and no.
Human Resource is responsible for the growth and development of employees. They also look after performance reviews.
However, budding enterprises usually have fewer employees, and this where the entrepreneurs commit their biggest folly. They ignore the HR strategy in favour of core operations that generate income.
This has been shown in a 2019 study by Telegraph, that says that 60% of start-ups fail within the first three years due to lack of ‘good managerial practice’ and ‘skilled workforce’. This insight makes it clear – Human Resource Management (HRM) is critical for streamlined functioning of all enterprises – established or new.
Following are some recommended strategies for incorporating human resource management more efficiently in a new enterprise:
- Evaluating Staffing Requirements – New enterprises begin with a smaller number of employees. However, HR can always evaluate whether the start-up needs to hire, outsource, or go for contractual positions.
- Internal and External Training – It is up to the human resource manager to create a training program for new hires as well as investing money in external training programs that nurture skills of existing employees.
- Performance Management and Talent Retention – HR managers are responsible for evaluating performance and formulating a rewarding program for talented and hardworking employees. These provisions are critical in fighting high attrition rates and retaining valuable employees.
- Compensation/Remuneration – Salary is a sensitive issue and its components should follow industry standards. Benefits such as experience-based increments, health insurance, post-retirement benefits must be taken into consideration to prevent discord among employees.
- Work environment and grievance redressal – HR is the link between management and employees. They must be equipped to deal with possible conflicts in the workplace. Moreover, it is up to HR to understand the employees’ needs and build a healthy and productive work environment.