Updated: Mar 23
There is a reason why the company has become stagnant or is not reaching the growth targets desired. We’ve discussed the culture, technology, products, marketing, and so on. At the end of the day, it all comes down to the people.
As we wrap up the series on transforming a company for growth, it is only fitting that we focus on the department that interacts the most with employee issues – Human Resources. Hire a strong Human Resources Leader Growth is tough on an organization. With many Type A personalities leading the way, it is easy to overlook the impact on employees. HR can be a very valuable asset to the leadership team if you use them wisely. Alignment with the vision – you need to make sure that your HR leader is fully aligned with the vision of growth. They must be on-board and fully supportive. That does not mean they agree with everything you say, but they are working toward the end goal of transformational growth. Why? When change starts affecting employees, they will flood HR with questions and concerns as their perceived “advocate”. HR should be compassionate but firm. Otherwise, they get caught in the middle and spend most of their time trying to appease disgruntled employees. Competent understanding of employee related laws and regulations – HR can protect the company from significant lawsuits and employment related cases if they have a competent understanding of the state and federal laws regarding employment. One of my biggest beefs earlier in my career was how long it took to fire an employee. If a state is a “right to work” state, why can’t you fire them on the spot? Seems like working with HR takes forever. The reality is that you can let someone go for no reason, but your risk may go sky high for legal action. There are categories of discrimination you have to keep in mind, wrongful termination issues, and just bad people looking to cause harm. If they file a suit against you and your documentation as to why is limited, a jury could certainly rule in their favor against you.
The biggest issue I have seen is that managers are not comfortable with difficult conversations and thus avoid them. They want to let someone go but get frustrated with HR when they require more documentation. HR’s role is to ensure that employees are being treated fairly. Layoffs are a different discussion as there are quite a few things to consider. A competent HR professional will understand the impact of laying off a certain percentage of staff and what happens if you need to hire different resources. In addition to hiring a competent professional, make sure and invest in them along the way. They should attend seminars, training, and ongoing development every year. Establish HR Policies and Reinforce I recommend having a well written employee manual with HR policies that is reviewed and revised consistently. Make it a living document that is referred to often, not just something handed out or referenced at hiring. This can become the guide for employees when trying to navigate policies that affect them. It can take a large burden off of HR when created and used effectively.
Employee Impact of Growth In my experience, transforming a company for growth has a major impact on the employees. I have seen, on average, 30% or more turnover. That’s right. You can expect at least 30% of your employees to leave the company. Why? A combination of things. Many employees like things the way they are. Aspects of the company are appealing to them and they are unwilling to change. You may need people to work longer hours, act differently, change their attitude, and most of all, buy into the new culture. Some employees cannot handle the new way and decide to leave. Let them go! If they are not on-board, they will resist change and drag the others down. Other employees may not have the right skills. They were good for the company at $10M in revenue but things change when you hit $20M. They could be a “surgeon” but now you need a “jack of all trades” with strong management skills. The point is to recognize that turnover is inevitable so plan for it. Identify the employees that are keepers and invest in their career growth. Work with HR to come up with a plan, make the investment, and stick to it. Don’t get me wrong, I want all employees to grow and have the opportunity to expand their horizons with the company. It all comes down to their attitude, skill set, and behavior. However, experience has shown that considerable turnover is going to happen so do not be surprised. Make sure your HR leader has experience in handling turnover and has a plan for strategic hiring. Turnover can have a big impact on the operations of the company. Minimizing the time to get the right people in place is key. Have a plan and a process. Simply creating a job description and posting online does not guarantee getting anyone better than what you had.
Human Resources as a Corporate Asset I like to have HR engaged at the highest levels of the company. The HR leader’s title may not be as high as others, but the right person can really be an asset to the executive team. They can advise the President/CEO on the right ways to do things to avoid employee related issues. They can provide a sounding board to ensure the growth approach does not alienate employees. HR can also measure the heartbeat of the company and provide real feedback to the leadership team. One word of caution – some HR professionals see access to the executive team as their chance to shine and get “a seat at the big table”. They will insert themselves into discussions and use policies and opinions to hold up transformational change to make themselves appear important. This has to be watched closely as it can create unnecessary barriers and frustration at the executive level.
Attitude over Aptitude Imagine coming to work every day and half your day is filled with employee complaints, issues, and concerns. Your job is to listen and provide feedback. Quite often there is not enough time for the HR team to do what they would like – assist employees in being successful while protecting the firm. Make sure when you hire HR professionals, they have a positive and upbeat attitude and demeanor. An HR professional that is tired and frustrated will cause employees to avoid them like the plague. They are already known as the department that fires people. You want employees to engage with HR so they feel heard and understand things that impact them. Much like a salesperson, HR professionals perform better when they feel appreciated. Take the time and show them that they matter and are an important part of the company. That brief “thank you for what you do for us” will go a long way and have positive ripples throughout the company. Summary You cannot grow a company without your employees. They are the lifeblood and most important component of growth. Let them know that. Everyone likes to know where they stand and that the company values what they do. Make no assumptions, employee retention and longevity are a competitive advantage for a company. Human Resources can be the differentiator if you have the right people supporting you in place.