HR As a Core Business Function Essay

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Small Business Success

The author of this report is asked to offer a small business and human resources plan given a certain scenario. A small business with close to one hundred employees is still lacking a distinct and separate human resources department. This is where the author of this report is asked to step in and fill that void. The author of this report will use a company with which the author is familiar as a basis for this review and analysis. Overall, the points of analysis will include the direction and strategy of the company over the next five to ten years, an overall human resources strategy that will be used, the competitive advantage that can be associated with that strategy, and a human resources scorecard that includes the proper four dimensions of financial, customer service, internal process and learning/growth/sustainability. While human resources is not a distinct and focused on priority with many small to medium business, it is still a function that should absolutely be taken seriously and handled completely.

Summary

As far as growth over the next five to ten years would go, that would entirely depend on the nature of the industry and the growth opportunities that exist. The firm that the author of this report shall focus on is a certified public accountant (CPA) firm that handles tax filings for small businesses and individual needs. Indeed, the accounting/CPA industry is growing very quickly and the tax laws that exist out there are added to or changed pretty much every year in some form or another. The need for qualified accountants and other similar professionals is at an all-time high and that does not look to change in the coming years and generations unless there is a revolutionary change to the tax code, and that would seem unlikely. The overall strategy of the firm is to grow and build the business through online advertising and word of mouth. The latter, that being referrals, is a huge boon for the business. The business strives to provide excellent customer service and is actually quite good at doing so. This leads to a very large number of people come to the firm for business based on the advice of their family or friends. This heavy referral rate has allowed the business to not have to spend a lot on advertising which is a huge plus for the bottom line.

Given that the firm in question is already at a hundred employees or so, adding a dedicated human resources function is an absolute must, and for a couple of reasons. First, relying on the reporting managers and other personnel to self-manage the human resources functions would not be the best idea. That would involve too many hands in the proverbial cookie jar. If too many people are involved in the process, then there is a much higher chance (if not a certainty) that there will be a lack of consistency from manager to manager and from person to person. Further, the people in these disparate departments and positions that are not human resources professionals should not generally be focusing on issues like hiring, on-boarding, orientation and so forth. Of course, the reporting managers could and should be involved with things like employee reviews, discipline and final decisions on hiring of people. However, there are many tasks that human resources and offload from those reporting managers such as initial screening of applicants, communication of human resources/company policies and so forth. As the company grows larger and larger over the next five to ten years, having a distinct human resources department will be vital so that the task is centralized and done consistently. Also, it will streamline and simplify what the people in the other departments have to do so that they can focus on their core competencies and job tasks (Reed & Bogardus, 2012).

When it comes to an overall human resources strategy, there are four general human resources strategies that most companies tend to follow more often than not. The first type would be the loyal soldier strategy. This is when there is an emphasis on hiring and retaining loyal employee who will do whatever tasks are asked of them. The roles for these "soldiers" are usually fairly broad. People are recruited based on the organizational culture of the firm and whether the potential employee in question will be a "loyal soldier." A strong bond is quickly built with eventual hires so as to reduce employee turnover. Hires under this framework are usually snagged earlier in their careers and they are given extensive training.

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The bargain laborer strategy puts an emphasis on employees who do not demand high wages. For that reason alone, it will not even be discussed because accountants are typically paid quite well from a competitive standpoint. The committed expert strategy focuses on hiring and retaining people that are experts in a given task. Accounting would be a quintessential example of a field that commonly uses this approach. The free agent strategy focuses on people that have "critical" skills but that likely will not be with the firm for long. Much like the bargain laborer, this would not really apply to most accounting firms as retention of good and loyal employees would absolutely take precedence over bargain-shopping from a labor standpoint or seeing many employees come and go as a part of normal business operations (Stewart & Brown, 2011).

Given the frameworks described above, the CPA firm in question obviously has to focus mostly on committed expert as their main strategy because that is indeed the nature of the field. Good accountants do not "grow on trees" and it can sometimes be quite difficult to lure them without the proper stratagem and approach. However, there can also be a focus on the loyal soldier approach. Solid college graduates and other accredited accounting professionals that are freshly certified can be snagged and be invested in. Typically, employees will become loyal and bonded to a firm that invests in them and commits to them. There is always the worry that a firm will invest a ton of resources and then the person will just run off for ostensibly greener pastures. While the prior days of employees staying with the firms for years and years is long gone, employees will absolutely commit to staying with an employer if they feel empowered, valued and they are obviously gaining something significant from the relationship. It is when a person feels undervalued and suppressed when they start searching for other avenues. This is not to say that some employees do not have unrealistic views of what they are entitled to and/or what is out there for them. However, this can be managed in a diplomatic and reasonable way and in a way that does not anger or put off the new hire (Stewart & Brown, 2011).

The human resources scorecard for this CPA firm is shown in the appendix. However, the author of this report would say that there should indeed be a strong balance and equal focus on the four main dimensions of a company, those being financial, customer service, internal processes and learning/growth. Focusing too much on one or two of those and not enough on one or two others can lead to imbalance that causes service or performance issues, if not both. The author of this report feels that there is a strong balance between all four functions and this should remain the case at all times. The company needs to always concurrently take care of their bottom line, the satisfaction of the customers, the integrity and proper execution of internal processes and procedures as well as the learning and growth of people in the firm. As noted before, offering learning and growth to an employee is amazing "hook" to keep them loyal to the firm rather than keeping an eye out for a "better" opportunity. It is up to the firm to make sure it is run well so that people do not get the inclination to think that better opportunities exist with firms with better cultures, better pay structures and so forth.

With that in mind, there are a few facets to an overall human resources strategy that should be put in place if they are not already. First, any and all human resources policies that need to be in place for the firm need to be put to paper. They must be clearly defined, perfected and they must be fully compliant with all of the relevant laws and regulations. Second, there should generally be no deviation from those policies. Granting exceptions to policies on the books leads to a precedent being set and it can create an uncomfortable situation (if not a lawsuit) if one person is granted an exception and another person is not. Next, there needs to be a proper and defined compensation structure for the firm. This should be comprised of a pay grade system that shows the range of salaries for the firm.….....

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