A web based source of all the hr information required to support small to medium sized businesses
A web based source of all the hr information required to support small to medium sized businesses
Whilst there are five to seven stages that typically describe the life cycle of any business it is only three stages that require significant investment in people and the development of a strategic HR Plan. These stages are the start-up phase, the growth phase and the maturity phase, each with their own unique challenges and strategies
In this phase, the business is officially launched. Entrepreneurs work on establishing a customer base, refining their product or service, and managing initial operations. Challenges include cash flow management and market penetration. At this stage it is also important to develop a clearly defined Vision for the business. Without this, your employees will not understand where the organisation is going, what ambitions you have for the future and an understanding of what part they play in delivering that Vision.
Once a Vision statement has been defined, then the team can define an annual Mission statement. The Mission statement is focused on the here and now, describing a company's function, markets and competitive advantages; a short-written statement of your business goals. At a minimum, a mission statement should define who your primary customers are, identify the products and services you produce, and describe the geographical location in which you operate. It can also be used to describe your Turnover, Profit, Share of Market goals for the coming 12 months.
Out of your Vision and Mission can come your strategic goals for the next 3 to 5 years.
Strategic goals are a critical component of an overall business strategy because they provide the focus and direction needed to align resources, efforts, and decision-making. Strategic goals provide specific, measurable, and actionable objectives that shape a company’s strategic planning process. Additionally, strategic goals are a bridge between the company’s overall vision and its day-to-day operations. By defining clear and achievable goals, a company can ensure that all stakeholders are working toward the same end and that resources are being used effectively to achieve your business goals.
Once your strategic goals have been defined you can build them into the annual business plan and allocate key responsibilities for various aspects of your plan to functional team leaders and their teams. Obviously, there will be a number of actions related to people in the plan, and this is where your People Strategy starts to take shape.
Finally, in the start-up stage you must take time to define the culture and company values. There’s no single definitive definition of company culture. That’s because defining company culture isn’t just about concrete policies, guiding principles or company traditions. In a way, it’s like trying to capture lightning in a bottle: Company culture is about the shared norms, values, attitudes and practices that form the collective identity of your company. At its best, it’s the invisible glue that binds your team and sets the stage for the narratives your employees play out daily, contributing to your overall organizational story. In most small businesses it is the personal values of the Founder/Owner/Operator that inform the company culture and values. Your passion and drive to create the business product or service should be the starting point to the behaviours and attitudes you want all employees to adopt.
Often businesses succeed very quickly and before you know it you are wrapped up in delivering your products or service, battling with the day-to-day operations. If you don’t take time to develop your Vision, Mission and Values at the start you will be well into the growth stage and feel like you are sailing a rudderless ship with no clarity of direction for your employees.
Similarly, if you have not defined your Vision and Mission it can be hard to identify the skills and experience you need from your team, which is essential when developing your HR Strategy. If a company’s values are not developed, then the behavioural skills required from leaders and team members detailed in any goals you set or appraisal documents you publish will not be clear. These behavioural competencies again sit at the heart of a robust HR Strategy.
This is why a start-up needs strong HR support to in the first stage to develop the building blocks for success.
The next stage requiring specific HR support is the Growth Stage. During this stage, the business experiences rapid sales growth and increasing market share. Companies may need to hire additional staff, expand their product lines, and invest in marketing strategies to sustain growth. This phase requires careful planning to manage resources effectively.
At this stage a business should have some robust business metrics to manage and maintain performance. These business measures are typically aligned to four areas of focus:
This is where a set of HR processes and procedures come into play to accelerate the growth of the business. These include:
An employer brand is an organization's reputation as an employer. It’s how others perceive a company as a place to work. A company's employer brand depends on factors such as the quality of its identity and initiatives that recognize employees. An employer brand influences a company's reputation among professionals, employees and shareholders.
Employer branding is important because an effective employer brand strategy helps companies recruit and retain quality employees by showing potential professionals a company is a place they may desire to work. In a competitive job market, professionals typically research positions and organizations to determine which opportunities to consider. That's why an employer brand highlights unique aspects of a company's culture, like the brand values, mission statements and initiatives. By building a strong employer branding strategy, you can ensure your company is attracting ideal professionals to fill the open positions, which may lower your company's recruiting costs.
Once you have defined your employer brand you can develop a resourcing strategy. A resourcing strategy will help your business get the right people with the right skills into the right roles at the right time. It’s concerned with how you recruit, retain, upskill, and support employees - so your business is equipped with expert employees, bringing their A-game to everything they do.
Done well, a resourcing strategy gives your business the advantage in the competition for top talent - with a proactive approach to sourcing, securing, and utilizing the best people for the job. It can help optimize remote and hybrid teams, accelerate recruitment processes, minimize disruption and project delays, improve client outcomes, increase employee wellbeing, open up opportunities, and generally boost your business and its bottom line.
Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. Performance management is a whole work system that begins when a job is defined as needed. It ends when an employee leaves your organization.
A performance management system includes the following actions:
At the heart of this process is the need for a robust annual appraisal process for all employees. This starts at the beginning of the financial year when the business objectives or key performance indicators (KPIs) are agreed and set out for the business. There then is a process by which annual personal objectives are assigned to the functional heads and then cascaded down the business to every member of the team.
Through a regular series of monthly 1 to 1s by Line Managers these personal objectives are assigned, measured and reviewed every month. This ensures Line Managers are giving the necessary coaching, feedback and support so every team member achieves their personal objectives.
A remuneration strategy is a crucial framework that ensures fair compensation for employees while aligning with overall business goals. It goes beyond mere salaries, connecting employee performance and motivation directly to your organization’s vision.
A well-defined remuneration policy needs to achieve the following:
A well-crafted remuneration strategy reinforces company culture, promotes desired behaviours, and supports strategic objectives.
This part of a People Strategy will include:
In a growing business there is a need to train and develop all leaders and managers to effectively lead and manage their teams. Also, by providing a defined set of leadership models and people processes ensures all employees are managed in a consistent and fair way which promotes a culture of fairness, consistency and opportunity, A training and development programme will achieve the following:
A Learning and Development Strategy defines and develops the “soft skills” leaders and managers need in all aspects of people management. Such a programme offers all management with skills development in:
In this growth phase it is essential these essential people processes are in place to ignite that growth and success of the company.
The final phase where the HR Strategy comes into play is the Maturity Stage. At this point, the business has established a strong market presence and stable revenue streams. The focus shifts to maintaining market share, optimizing operations, and exploring new opportunities for growth. Businesses may face increased competition and market saturation. It is also often the phase when owner/operators want to cash in and sell the business they have developed. At this maturity or exit stage then a good HR Strategy will start to uncouple the reliance the business has on the Founders/Owners and ensure the business has the necessary senior team with the skills, knowledge and experience who can run the business, making it a viable business for acquisition by interested parties.
This means recruiting and developing a senior management team that can strategize and then deliver the 3-to-5-year strategic plan. It involves recruiting a Head of Commercial and a Head of Production/Operations who can collectively sell and then deliver the product or service the business offers. They will collectively be accountable for the sales and profit performance of the business.
Reporting to them will be Heads of Department in Finance, Procurement, Customer Services, HR, Marketing and Sales who deliver their functional goals. These senior managers take ownership for recruiting, training and leading their respective teams. They will be collectively accountable for managing the day-to-day business with P&L accountability.
For any sale of a business the HR Strategy must deliver the following:
Understanding these stages helps entrepreneurs and business leaders navigate their journey, anticipate challenges, and implement appropriate strategies for success at each phase. It informs them of what to demand from an experienced HR professional supporting the business.
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