We have come across a few businesses that have been operating for many years, but working on a shoe string basis when it comes to HR.
However, those businesses are now finding that that approach is beginning to cause difficulties of one sort or another. So they have decided that it’s time to refresh. Time to invest some time into HR!
This Blast gives a little guidance as to what your priorities should be when beginning to ‘professionalise’ the way you manage HR. In recent months, we’ve written quite a few HR Blasts for larger employers, but this one is primarily for smaller employers and if this isn’t you, then please click away.
Here is what we will cover:
- Contracts of employment
- Policies and procedures
- Employment benefits
- Performance Management
- L&D strategy
- Record Keeping
But first… why bother with HR?
Typical issues that arise when a half-hearted approach is taken to HR:
- Line managers are inconsistent in the way they manage staff – which can lead to demotivation or even legal claims.
- Lack of information/record keeping leads to vulnerabilities when staff leave, mistakes made or complaints are raised.
- Managers often hold back from managing difficult issues due to a lack of clarity around, or guidance on, how to manage those types of issues.
- Creates huge headaches if you are looking to sell your business or raise capital.
- Performance, absence, grievances, flexible working and dismissals are badly or inappropriately managed.
- HR practices are seen to be preventing the growth or the business, or the profitability of the business, as they are no longer relevant or appropriate for the business in today’s world.
- A scattergun approach to training staff is taken which is neither cost effective nor successful in terms of developing the skills the organisation needs.
- Money is unnecessarily spent on resolving employee issues (legal costs and pay-offs).
- Staff retention and/or motivation is increasingly a problem.
- Staff feel/see that they are working for an organisation that is out of touch.
- People don’t always feel that they are being treated fairly or equally.
- New starters lack clarity around what is required of them.
Contracts of Employment
These need to be up-to-date and modern looking.
They must include the clauses required by law and the clauses that are essential for professional staff management.
In particular, out-of-date or non-existent restraint of trade or confidentiality clauses can cause huge problems. Equally, working hours, days, shift patterns, data protection, holidays and clarity around salary and bonus payments is essential.
They must also be easy for staff to read and understand, avoiding legalistic jargon and terminology that might sound posh, but which is next to useless in conveying to staff relevant and important information. It’s not uncommon that we come across an employee who is refusing to sign a contract, as a result of being scared or overwhelmed by the legalistic approach.
You must have evidence that new contracts have been issued to staff and that the new contracts have been signed, or otherwise accepted, by staff. (Be aware of any staff who don’t sign but who do raise objections.)
You must keep easily accessible copies of contracts issued. One company we came across had a filing system that was in date order – utterly useless when it came to trying to find contracts of employment for staff. We have no idea who thought that date order filing in HR would ever be a sensible approach. Another company worked on the windowsill filing system. Year on year everything was piled high on the windowsill in the HR Managers office. Definitely not professional!
Policies and Procedures
Best practice is continually changing and your policies need to be changing too.
This isn’t about keeping up with the Jones’ and not all best practice is relevant and appropriate for every organisation, but you do need polices and procedures that will ensure your managers and staff understand exactly what is required, by who, when and how. It just makes everything so much simpler and more efficient.
Critical policies for today’s world that often need to be added into existing polices include: family friendly, diversity and inclusion, professional conduct at work, sickness absence reporting, IT and security of information (including the use of social media) and anti-bribery.
Again, using plain English and keeping it relevant and appropriate is critical. This is not about confounding managers with a 30-page policy or impressing staff with a sophisticated legal handbook. Instead, it’s about setting out clearly and concisely what both managers and staff need to know.
With changing demographics in the UK, a surge in older workers in the workplace, a younger generation with different priorities, flatter structures in many workplaces, less job security and lifetime employment etc. if you are still offering the employment benefits you offered 10 years ago then you are probably out-of-date and your benefits will not be motivating or engaging your staff as they need to be.
Specifically, there is increasing interest in staff being allowed to get involved with CSR (corporate social responsibility) activities, and having easy access to flexible working opportunities. Opportunities for continuous learning, study and the gaining of new qualifications is also important for many.
And whilst it’s great to provide benefits, companies are wasting their time if staff don’t understand the value of the benefits provided to them. So time should be put into an annual statement of benefits provided to each member of staff and this should include money spent on conferences, learning events, external and internal training, pensions, holiday payments, sickness payments etc.
There isn’t a business we come across that is confident to say that performance management is managed well across the business. At times not one line manager has the confidence or knowledge to manage performance issues, at other times there are pockets around the business where staff are badly managed.
Performance management needs to be understood as including:
- day to day performance management/coaching by manager
- annual (or 6 monthly) appraisals/360 degree review
- formal performance management in line with the disciplinary procedure
In professionalising HR, line managers and directors all need to be informed about and trained in all three of these areas.
Policies and documents for use when performance managing an employee also need to be up to date and relevant.
L&D spend ideally needs to be driven by organisational needs rather than individuals requesting individual training. That said, it can be very motivating if an organisation agrees on training following a request from a group of staff.
It’s easy for organisations to focus on technical skills and compliance focussed training, but then to forget soft skills development.
However, it is often the soft skills that will determine how your business grows and develops. Soft skills that are often neglected include: negotiation, confident communication, motivating and engaging staff, sales, customer service, leadership, emotional intelligence.
It’s a rare smaller organisation that has conducted an L&D audit. It can be a really useful process though and provide real clarity about what the priorities are and what the return on investment might be if budget is allocated for those priorities.
How much will it cost?
A contract and policy review need not cost more than a few thousand pounds. Nothing in comparison to how much a legal claim or pay off of an unwanted staff member might cost you.
Just a few weeks ago we advised a new client that their practice of paying all staff off (even those who resigned) was, by and large, unnecessary and costing them many tens of thousands of pounds a year. Modern contracts and managers who understood the legal parameters of managing staff was all that was required to cease such payments.
What should we prioritise?
Contracts and policies are the essentials. Everything else builds from there.
As a second priority, it would have to be Performance Management. So often badly done or not even touched at all, but an area that costs tens of thousands for most managers in respect of under-performing staff reduced productivity and low morale.
Call us at Jaluch for cost effective options appropriate for your business. Plain English, avoidance of legal jargon, making it real and relevant to staff are our speciality. Support with:
- Employee documentation – including contracts of employment and contracts for services.
- Developing managers and supervisors.
- Supporting with day to day HR issues including performance management.
- Soft skills training.
- L&D audits.
Have you seen our Bags of Learning? An amazingly cost-effective way to roll out training!
The information contained within this article is for general guidance only and represents our understanding of employment and associated law and employee relations issues as at the date of publication. Jaluch Limited, or any of its directors or employees, cannot be held responsible for any action or inaction taken in reliance upon the contents. Specific advice should be sought on all individual matters.