Unlocking the Potential of Outsourced Human Resource Management

It is widely accepted that the SME sector is the engine house of the Australian economy. In employment terms it makes up 40% of the nation’s workforce. Unfortunately it is also the SME sector that has the least resources or capacity to effectively manage their human resource function.

HR is as important, if not fundamentally more important, to SMEs compared to big business as the effect of poor selection and performance can cause considerable disruption to a small business whilst effective outsourced human resource management can contribute more positively to the success of a SME.

How can SMEs introduce effective performance management strategies to attract, retain and reward the right people? The best advice would be to start with a simple system and consistently improve and review practices to ensure this area of your business is not overlooked.

An ideal outsourced human resource management system is one which satisfies 4 main objectives:-

To improve business and individual performance;

To link the key objectives and strategies of the business with individual objectives and strategies;

To measure the progress made towards the achievement of the strategic business objectives by evaluating performance, identifying improvements, developing new objectives and converting improved performance into rewards; and

To coordinate job design, recruitment and selection, training and development, career planning and reward structures.

The components of this system which may be introduced over a period of time depending on resources available include:-

Business plan linking company values and goals with its people;

Job Descriptions (reviewed and updated regularly);

Individual key performance indicators (KPIs) set at various intervals, e.g. monthly, quarterly, annually, etc;

Bonus policy and guarantee which links the performance of the business to individual remuneration – this may be a general policy or clause in individual employment contracts;

Performance reviews;

Professional development plans reviewed and updated annually; and

Ongoing feedback, communication, coaching and training.

In SMEs with multiple departments and line managers it may be appropriate to create a handbook and/or provide training with guidelines on how the above components can be developed internally with timelines and templates. This will equip managers with the ability to drive effective human resource management and empower them with responsibility to ensure its ongoing success. It also ensures consistency and transparency across the business when it comes to HR management, and this is vitally important particularly when it involves the provision of a reward mechanism.

Questions SMEs need to ask themselves include whether a performance management system and effective HR practices can be developed internally or externally, and what resources are available in the business for the implementation of the system. Resources to be considered may include persons within the business, time, knowledge and skills, a budget or allocation of funds, and external expertise or assistance.

Outsourced human resource management can provide 3 separate streams of services depending on the requirements of an SME. Outsourcers have an online portal which provides internal resources with the information and templates to develop and tailor the components of effective performance management outlined above which can be accessed for an annual fee. As an alternative to this, where external assistance is deemed appropriate, there is the option of engaging part-time outsourced human resource management system on a consulting arrangement to deliver the above objectives or a more comprehensive solution such as a fully outsourced HR department which takes care of all of your employment needs, including payroll, contracts, legal compliance and ongoing HR consulting and reporting.

The Recruitment Process and the Perfect Interview

Are you looking to recruit the next Employee of the Month? Not sure how to go about interviewing candidates? Our key pointers will assist you in preparing for the recruitment process:

Read the candidate’s resume before to the interview – This will ensure you don’t waste time re-learning the candidate’s background and provides you with a good sense of what the candidate is all about and what they may potentially bring to the position. Additionally, it will allow you to prepare in advance additional questions you may want to ask the candidate in order to delve deeper into their experience, skills and interests.  Last but not least and in all honesty, reading a candidate’s resume during the interview portrays a totally unprofessional picture of you and, hence, the business.

Pre-interview questionnaires – In some cases it might be useful for potential candidates to complete questionnaires prior to conducting the interview. Questions can relate to technical experience, how they would deal in certain scenarios and even non-work related personal goals and interests to get a good feel of how the candidate would fit the culture of the business.

Do not discriminate - Under the Fair Work Act 2009, prospective employers are subject to adverse action laws where a prospective candidate believes they have been discriminated against. For this reason, you cannot ask the candidate questions during the recruitment process about religion, age, height, weight, marital status, disability, national origin, etc., unless such questions specifically represent genuine qualifications required to perform the role.

Don’t be selfish – Depending on the nature of the position, it’s more favourable if several members of the team are present at the interview. The greater number of perspectives gained on the candidate the better the final result. It also avoids having three or four interviews with the same candidate, which can be time consuming, especially if you’re looking at filling the position soon.

Take notes – Don’t rely on your memory to remember responses!  It also shows the candidate that you’re interested in what they have to say.

Create a plan for the recruitment process and interviews. Although every position and company is different, there are some failsafe questions to ask candidates:

1.       Start with an icebreaker – “Did you have trouble finding our office?”, “This weather is horrible, don’t you think?”, “Would you like a tea or coffee?”

This will reduce any nervousness felt by the candidate and create a friendly atmosphere.

2.       Determine the candidate’s level of motivation – “Why have you applied for this position?”, “What do you know about our company?”, “Where does this position fit with your career path?”, “If you had to convince a friend to apply for this position, what would you tell them?”, “How important is the salary to you?”, “What are your long term career goals?”, “If we hired you what would be the number one priority on your to-do list for your first day? ”People apply for positions for various reasons – by asking such questions you will be able to gauge their true motivation for applying and actual interest in the job and company. 

3.       Ascertain whether the applicant is qualified for the position

4.       Throw in some whacky questions – “If you won $20 million in the lottery, what would you do with the money?”, “If you could trade places with any other person for a week, famous or not famous, who would it be and why?”, “If you were an animal what kind of animal would you be?”

The responses to these questions during the recruitment process will demonstrate the candidate’s ability to demonstrate competence, deal with challenges and confirm whether the candidate has actually produced results. Have they responded concisely and used practical examples or have they tried to talk their way out of answering the question? Most responses to these questions can be easily checked during reference checks.

These questions establish how creatively and quickly the candidate thinks on their feet as opposed to reciting well-rehearsed answers. It also allows you to find out more about how the candidate deals with surprises and how their mind works without asking overly personal questions. Pay attention to the candidate’s attitude, how they approaches these types of questions and the ease or difficulty they have in responding.

During the recruitment process you should also provide information on the company and the position. Keep it brief but detailed and allow the candidate to ask questions – this will also give you a chance to see how interested the candidate is about the role.

HR Management For SMEs

It is widely accepted that the SME sector is the engine house of the Australian economy. In employment terms it makes up 40% of the nation’s workforce. Unfortunately it is also the SME sector that has the least resources or capacity to effectively manage their human resource function.

HR management is as important, if not fundamentally more important, to SMEs compared to big business as the effect of poor selection and performance can cause considerable disruption to a small business whilst effective performance management can contribute more positively to the success of a SME.

How can SMEs introduce effective performance management strategies to attract, retain and reward the right people? The best advice would be to start with a simple system and consistently improve and review practices to ensure this area of your business is not overlooked.

An ideal performance and HR management system is one which satisfies 4 main objectives:-

-          To improve business and individual performance;

-          To link the key objectives and strategies of the business with individual objectives and strategies;

-          To measure the progress made towards the achievement of the strategic business objectives by evaluating performance, identifying improvements, developing new objectives and converting improved performance into rewards; and

-          To coordinate job design, recruitment and selection, training and development, career planning and reward structures.

The components of this system which may be introduced over a period of time depending on resources available include:-

-          Business plan linking company values and goals with its people;

-          Job Descriptions (reviewed and updated regularly);

-          Individual key performance indicators (KPIs) set at various intervals, e.g. monthly, quarterly, annually, etc;

-          Bonus policy and guarantee which links the performance of the business to individual remuneration – this may be a general policy or clause in individual employment contracts;

-          Performance reviews;

-          Professional development plans reviewed and updated annually; and

-          Ongoing feedback, communication, coaching and training.

In SMEs with multiple departments and line managers it may be appropriate to create a handbook and/or provide training with guidelines on how the above components can be developed internally with timelines and templates. This will equip managers with the ability to drive effective HR management and empower them with responsibility to ensure its ongoing success. It also ensures consistency and transparency across the business when it comes to HR management, and this is vitally important particularly when it involves the provision of a reward mechanism.

Questions SMEs need to ask themselves include whether a performance management system and effective HR practices can be developed internally or externally, and what resources are available in the business for the implementation of the system. Resources to be considered may include persons within the business, time, knowledge and skills, a budget or allocation of funds, and external expertise or assistance.

Employment Innovations can provide 3 separate streams of services depending on the requirements of an SME. They have an online portal which provides internal resources with the information and templates to develop and tailor the components of effective performance management outlined above which can be accessed for an annual fee. As an alternative to this, where external assistance is deemed appropriate, there is the option of engaging a part-time HR manager on a consulting arrangement to deliver the above objectives or a more comprehensive solution such as a fully outsourced HR department which takes care of all of your employment needs, including payroll, contracts, legal compliance and ongoing HR consulting and reporting.

Attracting the Right Candidate

Recruitment is time-consuming and often complex. Amongst many concerns the most common can be how to screen through the piles of resumes whilst ensuring that you don’t miss out on the perfect candidate for the job. The cost of hiring the wrong candidate is high, plus the impact of making a recruitment mistake will affect both you and your employees considerably. The real problem is not attracting people; it’s attracting the right people.

Recruitment is time-consuming and often complex. Amongst many concerns the most common can be how to screen through the piles of resumes whilst ensuring that you don’t miss out on the perfect candidate for the job so hr consulting must be done. The cost of hiring the wrong candidate is high, plus the impact of making a recruitment mistake will affect both you and your employees considerably. The real problem is not attracting people; it’s attracting the right people.

Your company needs to have clear goals about where it’s heading; when you are hiring you should be clearly communicating these goals to potential new-hires. Understanding your enterprise and its aims is important to applicants, especially the part where they fit in to helping you achieve those objectives.

You need to promote your available position; the job description needs to remain succinct, yet detailed enough to convey the nature of the role. Not only that, it also needs to make them want to apply in the first place. The candidate’s decision to apply will be based solely on what the ad says so the title is also crucially important, think of the advert as the resume for your company.

There are so many ways in which to advertise your position during the recruitment process, aside from the newspaper; online job sites attract a whole new type of traffic, plus there are social networking sites such as Linkedin, where you can actively search out the type of candidate you want and suggest the position to them directly.

Before looking elsewhere, have you looked within your company? All of your internal employees should be given the opportunity to apply for your vacancy; it is excellent for company morale and sends a good message to your workforce. The internal employees are more well-known to you and you to them, meaning a quicker settling-in period and lower costs. However, diversity within a business is priceless; any influx of new skills and knowledge will benefit everybody involved.

Communication with applicants, whether successful or not is imperative. Giving closure to unsuccessful applicants speaks volumes about your company culture; ignorance may actually do your business some damage, most likely through word of mouth.

Outsourcing the recruitment process will mean handling all of the above criteria with expertise; you would gain access to extensive knowledge of the exact right steps that are necessary to tackle the task at hand. As well as completing all the laborious processes such as the initial screening and information collation, all administration and background checks, interviews and aptitude testing can also be outsourced, leaving you free to fully prepare for your new employee’s start date.

The largest costs of recruiting arise from the consequences of getting it wrong; getting it right by leaving it to an expert is a popular choice for small to medium businesses.

Give the new employee at least a 90 day period to get up to full speed; it’s just part of the process. As is establishing a probationary period; it gives a clear and measurable way to verify the skills the employee laid claim to during the interview process and is also an easy way to address any underperformance issues. You should then measure your employee satisfaction and engagement levels regularly and consistently, the importance of this goes beyond the period of recruitment. Motivational meetings and performance reviews, training opportunities and reward & recognition programs will all help to keep your workers engaged, satisfied and happy to be your employees.