Human resources: the basics

Effective management of your human resources is key to building a successful business. Good human resource practices are about:

  • understanding the staff and skills you need
  • recruiting, selecting and retaining talented staff
  • developing accurate job descriptions
  • establishing effective teams
  • paying your staff appropriately
  • planning for the future
  • delegating responsibility.

Getting the recruitment and selection right

When recruiting, it's a good idea to follow a plan - decide well in advance the type of skills you want your staff to have as you grow and succeed as a business.

Learn how to plan your workforce and find the right people.

Establishing job descriptions

Accurate job descriptions are an important employee and business resource, providing a summary of employee roles and responsibilities, and the skills required.

With the level of change occurring in businesses today, job descriptions have become less rigid and more adaptable. However, they should never become inaccurate.

Job descriptions should be:

  • updated 2-3 times a year
  • the basis for regular performance appraisals and discussions about future training, development and promotional opportunities
  • mostly in dot point form.

Learn how to create a job description.

The importance of teamwork

Teamwork can boost your business's effectiveness and innovation. Setting up an experienced team is important because:

  • you can share the load
  • you may not have all the expertise required
  • it helps build credibility
  • members can focus on roles where they can make the most difference in building the business, and not be tied up in 'red tape' or roles they don't like to do.

You can set up 2 types of teams:

  • an informal team of friends, advisers, your accountant, lawyer and similar people
  • a formal team that acts as an advisory board, and whose members are paid to give occasional advice, meeting 4 to 5 times a year.

When building your team, consider the following:

  • Attach yourself to the right people. Like you, they must be passionate about the idea, product or service - making money is not the primary focus.
  • Choose a team that allows you to keep control and ownership. Access their expertise however, be up front about how you want them to help you.
  • Avoid hiring 'too many of yourself'. Seek people who are different to get balance in your team.

Paying people for their time and expertise

Pay is the amount you are willing to pay for staff with the skills or knowledge required to run your business day-to-day and plan for future growth.

In a lot of new ventures staff accept lower pay in the short term for involvement in something new and exciting, and with the expectation of higher pay in the longer term.

Read more about pay and entitlements.

Delegating responsibility to others

Delegation involves passing the authority for the completion of specific tasks or roles to others in the business. This is often a major problem among entrepreneurs and those who start businesses.

Consider this delegation exercise. Draw up three columns on piece of paper.

  • Column 1. What are you good at?
  • Column 2. What do you dislike doing, but is important to get done for your business?
  • Column 3.Who can do these important things for the business? Where can you find them now in your business?

Learn more about developing your leadership skills.

Find a mentor

You can also find a mentor who will help you grow into other roles in the business. Think of someone you know or you have heard about who is interested in the idea, product or service you are developing. Look for someone who has successfully grown a small business into a much larger one. Approach them. If the meeting goes well, ask them to be your mentor.

They have 3 roles:

  • to challenge you and your ideas
  • to support you emotionally and intellectually
  • to accept that mentoring is a two-way relationship. While you are learning from them, they will also learn from you.

Planning for the future

Succession planning involves the transition of the management and leadership of the business to other people. It is important for you to develop a 'backup plan' for your business. Who will do your work if you are unable to, or you decide that you'd prefer to do other things?

It is important for you to seek professional advice on strategies for succession. Organisational and HR consultants will assist you in defining these strategies, and your lawyer or accountant will be able to guide you in the legal aspects.

Learn more about succession planning.