Operating Without A Human Resources Department

Great Human Resource professionals add value to any organization.  Recruiting and retaining star performers, building a productive workforce, coaching managers to perform at higher levels, ensuring that the organization stays compliant, and raising the bar on performance are what HR brings to the table.  HR can be the difference between success and failure in an organization.  But what can an organization do if they don't have an HR professional on staff?  This is the predicament faced by many companies.  Anne Craigs of the YWCA of Central Maine understands the value of HR from her days in banking and would love to have a HR professional on staff, but size and affordability precludes that possibility for now.  So Anne and her managers must do it all.

Without HR, managers must recruit, retain, pay, and develop their employees.  Nearly all organizations assign the administrative aspects to a finance person who manages the benefits and keeps the records, but that's where the similarities in approach end.

So how can businesses successfully manage without a formal HR group?  Here are 5 tips:

1. Delegate the HR responsibilities to your managers, but train them first-and give them the authority to make people decisions.  Strong supervision is indispensable in building and maintaining a productive work environment.  Good supervisors can be the eyes, ears and voice of the organization.  But if they are not properly trained, they can expose the organization to morale problems and lawsuits.

Most small organizations fall short in developing their supervisors.  Too often the good, reliable technician is anointed supervisor one day and little attention is given to whether she has the skills or desire to manage a staff of people.  Couple this with little or no supervisory training and coaching and you have created a potentially explosive situation. When supervisors are not trained, you will find organizations where productivity, quality and service are weak; turnover and absenteeism are high; and workplace accidents and employee complaints are frequent.  Organizations that invest in developing the leadership skills of their supervisors reap tremendous rewards.  At DiMillo's Floating Restaurant, it's the supervisors who shoulder the typical HR functions and that brings them closer to their staff.  At the Lincoln Home, the lack of an HR department has fostered a tight working relationship between the staff and managers.  Without the buffer of HR, supervisors have become more accountable for recruitment and management of their people.  When you're responsible for hiring the person, you can't blame anyone else when things don't work out.  This strategy works at Lincoln Home where turnover is well below industry average.

2. Develop systems that promote consistency because without it productivity and morale will plummet.  Whether it is workplace rules, establishing pay plans or granting time off, many organizations fall short here.  When organizations begin with a handful of employees and the owner has his hands on everything that happens, then informality may work.  But as the organization grows and employees are added, structure and systems become essential. 

At Huston & Company, an organization of eight employees, owner Bill Huston realizes that the days of no systems, policies or procedures will soon be over.  Though there is the desire to cling to the days when decisions could be made as situations occur, he also understands that the risk of inconsistency can result in misunderstandings or worse.  As organizations grow, more turn to outside consultants for help in developing policies and employee handbooks.

Determining what to pay people is a trickier task.  Employers are sensitive to the need to pay people fairly, but few have formal pay systems.  Many are unsure what and how to pay their people and often set wages based upon what they hear from applicants and employees.  Others depend on industry groups who provide them wage surveys.  David Geary of D.L. Geary Brewery uses a strong knowledge of his industry and the market to ensure that he pays his people competitively.

3. Know the law: state and federal laws change frequently.  Have an outside expert regularly brief you on regulations that can impact your workplace.  Without HR expertise, employers are most vulnerable to compliance and employee issues.  It is nearly impossible to understand and keep up with changing laws.  Yet, few managers have received the training to address problem employees and many managers don't know what they should know about the law-a real recipe for disaster.  Successful organizations go to the outside for expert advice.  DiMillo's and Gritty McDuff's Brewing utilize the assistance of their industry association to provide them valuable updates on compliance issues.  Other organizations use corporate attorneys and HR consultants who provide them with newsletters, updates and telephone helplines.

4. Use outside experts to handle thorny workforce issues: you don't want a manager guessing about how to handle a sexual harassment complaint.  Employee relations issues come up daily in all organizations.  Performance problems, poor attendance, workplace injuries, or simply the need for time off-when dealing with people, problems occur and supervisors need to be able to respond and they need to do it correctly the first time.  With most situations, a well trained manager is able to routinely address the issues.  But occasionally, complicated issues arise that go beyond the norm.  Norm Labbe, Superintendent at Kennebunk, Kennebunkport, Wells Water District has a human resource consultant on retainer to help him and his managers when difficult employee issues arise.  Norm likes to be proactive when dealing with his employees and that may be why his organization enjoys high morale.

5. Address workforce issues immediately: when behavior issues are handled right away, there is far less stress for the managers and fewer concerns for error and lawsuits.  Though managing a workforce is always difficult, good employers know that if they take care of their people many of these problems evaporate.  Creating a productive work environment where people are valued and respected guarantees retention, high morale, and a steady flow of applicants.  It takes creativity, but HR doesn't have exclusivity on bright ideas.  Walk into Gritty McDuff's Brewing and you'll be greeted with a smile, the sounds of laughter and super customer service.  The staff works hard, but co-owner Richard Pfeffer pays them well, provides good benefits and flexible scheduling, and fosters a fun working environment-and he does it all without a Human Resource department.