Start-ups are continuously growing day by day in every sector of all industries. Entrepreneurs are coming up with products that serve and satisfy the market’s need.
Now we can find any products from flying pet’s toys to travel luggage that has built in WiFi and a portable charger. Small and medium-sized enterprises (SME) are the backbone of the nation’s economy. However, 38.8% – 45.1% of new businesses fail within the first 4 years according to U.S. Bureau of Labor Statistics.
Some common reasons why businesses and startups fail to succeed are due to lack of knowledge about the business and the market, unrealistic objectives, and no proper managerial experience. It’s that moment of the adrenaline rush for all business owners thinking they can survive without having proper plans and strategies. Most startups and entrepreneurs fail to have a proper HR Strategy.
Usually SME has an informal and flexible strategy when it comes to managing their numbers using this one expense, which is “people”. No matter how good the product is, if companies fail to acknowledge their employees, the business owners might end up running every division by themselves. All business owners should reflect to the business as if they are looking at themselves in a mirror.
The following are few tips for all entrepreneurs and starts up to consider when it comes to managing and leading their human capital.
1) Tip: Finding the right fit
As business owners, we all want to look for our identical twins. Someone who will work as hard as us and as passionate as us. If that was the case, every business would have a happy fairytale ending. Employees simply doesn’t have the owner’s motivation. Instead of looking for unrealistic images we created in our heads, employers need to search for candidates that match and fit in the company’s culture.
In addition, business owners should look for diversity in various factors such as education, culture, experience. Diversity not only represents an equal opportunity work environment but also enhances the company performance. Diverse individual brings different perspectives to the company which will leads to creativity and innovation. Therefore, they can provide clients with breakthrough solutions from different viewpoints. At the end of the day, diverse angles will give us different reflections when we look at ourselves in the mirror. Therefore, it’s always great to have a 360-degree mirror to reflect us as who we are.
2) Tip: Setting expectation for the team
We look at ourselves every day in the mirror, reflecting who we want to be and how to get there. Owners and entrepreneurs should ask themselves; What do you as a business owners want from the team? What kind of performance are you looking for? How employee’s performance effects the organization? These questions will allow employers to describe clearly what the job functions and receptibilities are for each role. Employer’s expectations lead to employee’s action and attitude towards the business.
The way the business owner portrays himself will be the reflection of the team member’s attitude. This certainly a HR implication because it will also lead to employee’s satisfaction and retention. Employees should feel that they are a part of the organization’s success equation. This will certainly create a strong bond between the business owners and employees which will lead to loyalty in the long run.
3) Tip: Design Training and Development programs
Not all your best workers will be your best trainers. A lot of time business owners fail to acknowledge that sentence above. I have personally been through this stage myself. I was previously trained by a great employee who achieved many organizational goals, but unfortunately she was not able to train effectively. Due to limited resources in small businesses, employers like to push their star performers to train new hires without proper training on how to train employees. Therefore, employees may not have the quality of training that they deserve, which will have a dramatic impact on the business in the long run. Just like my father once told me, “there is no such thing as a shortcut to success”.
Employers should create training program starting from planning the orientation process. This mirrors the overall image and sets expectation for the company’s culture. I have seen where companies bring new hires to lunch or hold a welcome party for team members. These are just a few examples of how to expose new teams to the culture of the company. I would highly recommend some form of gathering activities that allow the new hires and current employees to bond, which will help them to work together effectively and efficiently later.
When implementing a training manual, entrepreneurs must think about how the training relates to the position. New hires are often disengaged in the training process because the information is irrelevant to position. Therefore, training manual must be customizable and adaptable to each department purposes and objectives. Remember training and development are not like buying a cap that one size fits all.
4) Tip: Create compensation and benefit strategies
Compensation and benefit packages can say a lot about the company. A well-designed benefit and compensation package will help to attract and retain your people. Compensations and benefit packages refer to as health insurance, retirement plans, and even performance bonuses. Business owners need to constantly ask themselves; what type of benefit and compensation packages should I offer to attract talent candidates.
For example, hospitality industry is known to have low wages. However, hotel companies offer extraordinary travel rates for employees, which can directly transfer to their friends and families. This can be one of the factors that motivates employees to stay and be loyal towards the organization.
Additionally, business owners need to understand the importance of compensations laws and regulations. For example, Fair Labor Standards Act regulates child labor, overtime wages, and minimum wages. If business owners fail to comply with these regulations, the company may face penalties and charges. For the businesses to be competitive in the market, they must come up with creative benefit packages that attracts potential candidates. Remember the old saying, “take good care of your people and they will take care of you and your business”.
5) Tip: Understand employment laws and regulations
Don’t be afraid to ask for help, there is no shame for that. SMEs entrepreneurs may not have extra capitals to hire an attorney to run the legal compliance of the business. Therefore, its wise for business owners to educate themselves on the employment legal compliance before they see themselves in court. Key regulations employers should know are; employee’s rights, discriminations and harassments, hiring process, work safety and employment termination.
Another recommendation is seeking help from your local Small Business Administration (SBA) or SCORE Association. These non-profit organizations help to provide legal guidance. SCORE members are highly trained to serve as counselors and advisors, and mentors to help startups and business owners with fundamental legal knowledge.
6) Tip: Being transparent to the team
Have you ever stepped out from a shower that was steaming hot and the mirror was foggy? What do we do next? We simply use our hands to clean the mirror, so we can see ourselves clearly. Just like in any organizations, business owners and entrepreneurs need to be transparent in the company. Employers need to share information and data to employees so they can be able to perform as expected. This will allow employees to be engaged in the workplace and work together as a whole to create a better outcome for the business. Tell your employees what they need to know to make your business succeed. There is no point of not communicating and regretting afterwards. This is a simply concept but a lot of businesses still fall into the same trap.
“Mirror mirror on the wall, who in this land is the fairest of them all”. We all want our answer to be “You”. We all can make that happen. We don’t need a magical mirror to tell us that. We know what we need to do and how to get there. All business owners should reflect themselves to the business as if they are looking at themselves in a mirror. With positive reflection, comes positive outcomes! Following those guidelines and tips above will not only enhance the work culture but also give owners and entrepreneurs a framework to work around. Never forget to keep reflecting because you might lose a piece of you as time goes by.