SMB’s – 3 mistakes to avoid when it comes to your people strategy

Introduction

As a small-medium sized business there’s so many things that you COULD when it comes to people, so many leaders ask the question “what do we really need to focus on?”. Unfortunately, there’s a lot of people in my network who either think that they don’t need a people strategy as they’re “too small” or even worse, they “dip in and out”, running random initiatives without any strategy or meaning behind them.

Based on my experience of supporting SMB’s over the last couple of years, I feel as though as soon as you hit the 5 people mark, processes and systems are required to pro-actively begin business growth. However, the reality is that most business leaders wait until they have high employee attrition, differing standards and values, along with varied performance levels across their business, until they want to look at a people strategy.

Just to be clear, we’re not talking about “HR stuff”, people strategy is referring to talent management and organisational development projects that will drive your business forward.

 

Remember… your employees work closest with your clients, so invest into them to see an ROI when it comes to clients.

 

The purpose of this weeks blog is to look at 3 common mistakes that I have seen SMB’s make over the last couple of years when it comes to people strategy. With the view that if you’re about to embark on a people strategy journey, you can learn lessons from other businesses who have been in a similar situation to you – saving you time and money!

 

#1 Make all decisions at a leadership level

Ultimately some decisions and conversations need to remain at a leadership level but when the opportunity arises I cannot encourage you enough to give your employees a voice. Over the last couple of years I have seen businesses spend thousands of pounds on new benefits systems, wellbeing initiatives, away days and more, with absolutely no return on investment – it has ticked a box at best!

When you ask your employees for feedback it leads to better and quicker adoption of new projects, less time wasted focusing on things that are not important and also drives a culture of innovation, where employees are consistently looking for ways to improve your business.

Best of all, when you’re asking employees for feedback it can be free! Of course there’s a time consideration but if you end up reducing costs or improving performance off the back of the feedback, then you can easily work out an ROI. I’ve seen short, concise employee surveys work really well. Specifically, a survey that gives you a temperature check of different parts of your business, but also has qualitative data that provides you with a series of actions works perfectly. Focus groups are good too but come with the caveat that you cannot make them anonymous like you can with a  survey.

But… if you’re going to ask your employees for feedback, it is crucial that you acknowledge and potentially action change off the back of feedback. Far too many businesses run annual surveys that take employees a long time to complete and they never hear anything back. Equally, HR teams end up spending too much time running through the data, for there to be a potential return for their time.

 

#2 Focus on the advanced “nice to haves” when you do not have the basics in place

You may have noticed that almost all of my content at the moment is focused on getting the basics and foundations in place, when it comes to people strategy. This is because I am sick of seeing SMB’s invest into advanced initiatives, that sound great, but without any foundations they do not have the desired impact.

With our clients I have seen that road mapping your people strategy over a 3 year period can work really well. For example, we’re going to focus on the following… year 1) communication, employee insight and engagement, developing leaders 2) reward and recognition 3) CSR, employee wellbeing and performance management. Using this method will enable you to distribute resources effectively and help you to get a business case signed off – it looks sustainable, not just an ad-hoc project that will die out within a couple of months.

Focusing on the basics isn’t sexy or exciting but it will ensure that when you do focus on the advanced initiatives, they have maximum impact.

We’ve all seen businesses who put beanbags into their office, have break out areas and holidays away – but when they have underlying culture issues e.g. weak leadership capability and poor people management, will their employees really perform to their optimum level?

When it comes to people strategy, I’ve learnt that a lot of the problems and challenges that you face as a business could be for numerous reasons, but it is important to get to the core route – which isn’t easy. This is why employee insight and feedback is so important! Don’t assume anything, make evidence based decisions.

#3 Outsource too much or keep everything in house

Anyone who has experience of working on projects knows that a key consideration is how much do you rely on external expertise  to support delivery?

Ultimately, most projects require some kind of external support, typically coming in the form of a technology/SaaS partner, or a consultancy.

You have to find the balance. If you rely to heavily on external partners then this will work out very expensive from a financial perspective, and also it won’t be bespoke to your organisation – nobody knows your business better than you. Equally, I’ve seen businesses try to deliver projects in house and they simply don’t have the capacity – BAU (business as usual) takes over.

It can be as simple as conducting a SWOT analysis to understand what the project teams strengths, weaknesses, opportunities and threats are when it comes to the people strategy. For example, a lot of the SMB’s partner with us when it comes to developing leaders, as they do not have the coaching/leadership knowledge to deliver results.

Another benefit of working with an external partner is the fact that you’ll get “another pair of eyes”. Internal relationships and other factors can often affect your perspective, so having someone come in without any bias can be critical. The obvious benefit of delivering internally is that you’ll invest less financially – not including the hidden cost of time!

Conclusion

To conclude there’s a lot of areas that you COULD focus on when it comes to your people plan but it is important to understand what you SHOULD invest time and money into – the reality is that the “should” initiatives won’t be as exciting as the “could”.

Based on my experience of working on people strategy for projects over the last 3 years, make sure you avoid 1) making all decisions at a leadership level 2) focusing on initiatives that aren’t important 3) relying too heavily on internal or external resource.

As always, keen to hear people’s thoughts on this so please like/comment/share.

Harry Wright

Employee Engagement and Client Delivery Consultant

Rencai Group

One Comment

  • Ian Williams says:

    Hi Harry, I think these are all valuable areas of insight, I would add a few points as well:

    – don’t underestimate the power of data and insight into making decisions. Organisations don’t need huge core HR platforms to get data, you can use basic tools to collate information to help make decisions
    – fixing the basics is not a one of activity, people assume that if they do that first they can then move on, unfortunately as the working world evolves due to societal, technological or legal changes the basics have to be reviewed and updated, it’s easy to fall behind and then you have to invest more to catch up
    – completely agree with engaging with the teams, as HR professionals we should also ensure we engage with our ‘internal’ customer as they can help us deliver the right solution

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