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The HR pain-point – can online solutions help?

Managing staff – whether it be finding them, recruiting them, keeping them, administering them or moving them on – is widely seen by business owners as being a huge pain-point.  Those that feel the most acute pain are the businesses that are no longer ‘small’ yet they haven’t reached a size whereby they can employ an HR expert.  Many businesses that employ between 10/20-100 FTEs see their HR setup as the biggest single weakness in their business …
“HR would be a day a week if we really wanted to run the company properly.  But we’re still in the situation where it’s ‘shit we’re busy, ring around Johnny who’s got a mate who’s an excavator operator, bring him in, 5 minute conversation ‘yep I’ve done it before’ and job done!’ (ie hire him!)  It really is that old gut-feel perspective, there’s no science to how we do it … The performance review is that if you stuff up you’re out the door.  It’s really so basic at this stage … It is the one area that the business has no skillset in.  There’s no-one in the business who’s really had much to do with it except in an ad-hoc way.  It’s our big ‘hole’.  We are pretty much at risk if we have disgruntled staff.” (Construction, 12 FTEs)  
(Q : How do you manage your HR?)  “We just shout at people.  I find it gets depressing the more you look into it.  Ignorance is bliss I think.  We try and deal with people as people and when we need to talk about rules and regulations then we’ll talk with an individual rather than trying to put everybody in the same pot and say ‘these are the rules for everybody and it’s a one size fits all’.  A lot of HR stuff is like that – HR is designed for covering all of the employees at once rather than looking at an individual.  I suppose we’re still small enough to try and treat people as people rather than saying ‘here’s the standard letter about the latest changes’.”  (Manufacturing/Retail, 52 FTEs)

It is noted that the above business owner – who employs 50 people – feels that his business is still sufficiently small to be able to manage HR by just shouting at people(!)  Most business owners disagree and feel that HR management is an area that gets caught in a time-warp as other aspects of their business develop in sophistication as the business grows …
Our weakest area is HR.  I’m aware of things but I just can’t do anything about it.  I did say to my offsider ‘come January we’re going to get a return-to-work mum who’s been in HR’.  Because I need someone to come in and write policies, procedures. We’ve gone from being a small company – where everything’s ad-hoc and you give verbal policies – to a company with 50 people and you can’t operate on verbal things.  That’s the one area we haven’t really grown in.” (Aeronautical Engineering, 50 FTEs)
The fact of the matter is that employers are becoming more aware of the risk they are exposed to by not developing an effective HR solution.  With increasingly litigious employees this is a time-bomb …
“The biggest challenge is staff – the challenge is that they are very aware of what the awards are and workplace law.  I think I’ve got a good grip on it and we use a workplace lawyer but they’re looking to push the envelope on everything – the absolute limit.” (Physio, 45 FTEs)
“A lot of the rules that we have to follow that are supposed to look after our staff – our workers – really have a negative effect.  Over time we’ve had quite a few compo claims that are very grey.  Previous injury or doing sport – oops.  A perfect example, one guy knew he had a hernia and hadn’t done anything about it.  He knew he was leaving so he decided to say it happened at work.  I had no way of proving it didn’t happen at work.  I ranted and raved – and then paid for the hernia operation.  So I have to walk on egg-shells now for everybody and as soon as someone walks onto my premises for work, I’m responsible.” (Wholesale/Retail, 100 FTEs)

Given such comments it is no surprise that some business owners are looking at online solutions to provide them with the necessary expertise and systems (and protection) at a fraction of the cost of HR personnel …
“We have an online cloud-based HR system where we can download the latest documentation.  There’s a few around now.  Because the laws change so much, how do you know you’re using the most up-to-date employment agreements and all that sort of stuff? So with this system there’s lawyers so they update documentation based on the laws and anything that you download – because it’s cloud based – is all up-to-date.  And if you need some kind of verbal advice, they offer a help line.” (Media, 110 FTEs)
“We use an online service and to a certain degree they’ve helped us interpret these awards … What they’ve helped us with is how to prepare good policies and procedures in the correct language.  The number one issue is that they update their information, but if you buy disks or books, they’re stale and no-one ever reads them again.  So they’re fresh so when you tap-in you’re going to get whatever’s relevant and new.  The help desk is good.  But they’ve helped us write good contracts, which we weren’t able to write … Any business – small or large – they almost need a full-time HR person, that’s probably the next person I’m going to employ.” (Wholesale/Retail, 100 FTEs)
“We’ve partnered up with an online mob who have a holistic employer-friendly service. Workplace Australia will prosecute the needs of employees and this mob will help usThey’ll standardise our contracts, they’ll give advice where we’ve got potentially troublesome employees and help us out with some timely advice that gives us peace of mind in that legal space.  Importantly if we had an employee who wanted to take us to FairWork Australia – and we lost the case but followed the protocols set down – then they’ll foot the bill.  $10 grand a year, 50 employees – it gave us some peace of mind.  It’s just a minefield.” (Restaurants, 48 FTEs)
We’ve got an online rostering program where you set profiles up for each person, you allocate them hours, they can do adjustments on their end, so everyone has an app.  They come into the shop, check-in when they’re there, check-out when they leave, check-out on breaks and it records everything.  I think you can even set your pay rate in there so you get a full report that you just pay at the end of it.  And it feeds into Xero as well, so it pre-populates your wages and you’re off.” (Cafe, 5 FTEs)  

Conclusion : The scope for online HR solutions is significant because most businesses cannot afford a full/part time HR resource yet employers generally realise that this is a difficult and risky area where they have very little expertise.  It is a key pain-point for businesses, especially those that are experiencing growth, so expect increasing interest in online HR solutions in the coming years.
Next Month : Words to be avoided in SME communications

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