At a glance
- Hiring is the most critical HR task; bad hires are costly to recover from.
- Prioritise effective onboarding and deliberately shaping your business culture and core values.
- Defer complex performance management systems and discretionary perks until the basics are right.
- Use technology like generative AI to help draft policies and recruitment materials.
Running a small business means wearing many hats, from servicing clients to keeping the books balanced.
Human resources (HR) is one of the many subjects competing for your attention. But if you’re like many accounting firms, you don’t have the scale to hire an HR specialist. And with many demands on your time, HR may be one of the subjects that seem best put off to another day.
So it’s time to get ruthless. Of the many tasks that HR specialists perform, some are more important than others. Which matter most, according to HR specialists themselves?
Hiring matters most
According to Karen Gately, founder of leadership and people-management consultancy Corporate Dojo, the risks for small businesses that get HR wrong are significant. And that’s particularly true when it comes to the issue of hiring. Bad hiring, she argues, is generally the hardest mistake for small businesses to recover from.
“Recruitment is the backbone of your people strategy,” she says. “Invest the time and energy and put structure around it to give you every chance of getting that right.”
“If you hire the wrong person in the first place, good luck, and may the force be with you,” she adds. If a leader puts the wrong person in a position and doesn’t correct their mistake quickly, “then it can become hugely time-consuming and energy-zapping for the leader, and puts pressure on the rest of the team.”
Recruitment agency Robert Half estimates the average cost of a bad hire to be in the order of 15% and 20% of that employee’s salary. Beyond the financial cost of hiring mistakes, the flow-on effects of a bad hire can range from underperformance to conflict and poor customer outcomes.
“Without the right team in place and people delivering at the level of their potential, it’s very hard for small businesses to grow,” says Gately.
“You need everybody all hands on deck, passionately engaged in making things work so that the business owner can create capacity for themselves to focus on growth and client relationship management.”
The challenge for small businesses is not whether to invest in HR, but how to focus their limited resources. Recruitment tops the priority list.
What to prioritise …
Gately has advice for streamlining other HR practices down to the essentials. Beyond recruitment, she emphasises two other essentials that should never be overlooked: onboarding, and culture.
Effective onboarding, which includes clear communication around both performance and cultural expectations, is also crucial.
And even as a new hire is coming on board, business leaders should begin orienting them to the business’s culture.
“I would strongly encourage that very early in a small business, we start to think quite deliberately around culture,” says Gately.
“Rather than waiting until you’ve got a problem with your culture, get really clear on what our core values are, what we truly believe in, and what that actually looks like in practice.”
To support those values, she recommends ensuring a handful of foundational policies are in place.
“You don’t need 20,000 policies like a large organisation might,” she says. “But you do need a clear set of policies around bullying, harassment, discrimination, and occupational health and safety.”
… and what to park
On the flip side, some HR activities can safely be placed further down the list. For example, health programs and discretionary perks might be common in large corporations, but initiatives like this can create an unnecessary burden on time-poor business owners.
“That’s going to make no positive difference if you don’t have the basics right” says Gately.
Even performance management doesn’t need to be complex, she adds.
“If you hire the wrong person in the first place, good luck, and may the force be with you.”
Karen Gately, Founder, Corporate Dojo
“There’s this perception that it has to be this big process. But a simple paper-based form outlining goals and development priorities for the next six months is often enough.
“In accounting, for example, you can just leverage [an existing] competency framework rather than building your own from scratch.”
Streamlining HR with the help of AI
Technology can also play a role in keeping HR simple. Generative AI in particular can help small businesses manage HR more efficiently, provided it is applied with care.
“[For example], if you go into ChatGPT and say, ‘Design me a template for my performance review conversations,’ it will do a pretty good job,” says Gately.
“Or you can ask it to draft a simple policy outlining bullying and discrimination in the workplace in Australia. For comfort’s sake, you might want to run it past an HR advisor or employment lawyer, but it will get you a long way down the path.”
The same applies to recruitment. AI can help leaders generate interview questions that assess both technical ability and cultural alignment. This can save time for small business leaders while also helping them make better hiring decisions.
Judgment still matters
However, she cautions that no tool can replace sound judgement about who you bring into the business.
Gately’s golden recruitment rule for small businesses is simple: hire for attitude as much as technical skill.
“If somebody is not quite where you need them to be technically, but they’ve got the ability to learn and they’ve got a good attitude, they’ll get there. Whereas, in contrast, you can hire somebody who’s technically really qualified, but they can’t deliver because of [a lack of] interpersonal skills.”
HR doesn’t have to be complex or costly, she says, but it does have to be intentional. By focusing on the essentials of recruitment, onboarding, and culture, and by making smart use of technology, small businesses can avoid the pitfalls that come from neglecting people management.
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