Time may be right to add outside HR support to growing system
If people problems are keeping you up at night, consider the option to outsource some or all of your human resources functions. But there’s one HR function you should always handle yourself: employee relationships.
So, what’s keeping you up at night? These days, you might have a list. Let’s just start with human resources.
Do you need HR support, but aren’t able to invest in a full-time staff? Do you worry that you aren’t doing enough to develop your talent? Do you feel anxious when you get confronted with employee problems, helplessly watch good employees leave, or cross your fingers when hiring new employees? What’s your HR strategy, anyway?
Don’t have one? Not having an HR strategy is common for growing franchise businesses. But HR expertise is crucial to your company’s success. We don’t hesitate to hire accountants for our financials or lawyers to protect us from risk. So why don’t we do the same with HR? This isn’t about managing fluffy “people problems.” Studies show companies that don’t put the right HR structures in place suffer in terms of lowered customer satisfaction, productivity, even revenue and profitability.
First, understand that HR is multi-dimensional. Second, realize you can outsource any or all of its dimensions. We’ll talk about how some companies did just that with great success. But first let’s briefly discuss three dimensions: organizational development; administration and generalist activity; and recruiting.
Managing human capital
Think about organizational development as human capital management. It includes change management, goal setting, performance management, leadership skills, training, even coaching. This is the type of work that companies without HR staff often don’t have the skills to do and companies with HR staff often still don’t have the bandwidth to do. And yet it’s an area proven to provide a competitive advantage.
Sport Clips’ VP of Finance Scott Perry says figuring out how to handle HR tasks was a strategic decision. At Sport Clips, they started that process by asking, “Where do we want to be?” Then, they took steps to ensure that their strategic vision was aligned with the skilled talent to get them there.
Sport Clips developed a robust management training programs to set goals, develop action plans and build teams. It was so effective for their home office that they are rolling out this “Leadership Series” to their franchisees through videos and live training sessions.
So back to you. How can you effectively recruit and hire talent, develop your organization, manage payroll and benefits, manage change, customize a performance management system, develop your leaders, and train new hires… all without a dedicated HR staff? Well, you could outsource. Talent and human resources consultants can give you exactly what you need, when you need it.
KBP Foods has the outsourcing model down to a science. Literally. Much of this has been led by President and CEO Michael Kulp, and his passion for creating “A Great Place to Work, A Great Place to Eat and A Great Place to Own,” as the company’s motto goes.
With the help of a talent consultancy, KBP Foods developed a robust model where desired skills and behaviors were defined and prioritized for each position in the organization. Everyone who goes through the interview process, whether it’s an hourly employee or a CFO, gets assessed against these criteria.
This helps make hiring decisions. But it does much more than that. The assessment becomes the foundation for a dialogue between manager and new employee and it is the basis for a personalized development plan for every single employee.
What has this done for KBP? “Once you’ve used an interviewing process like this, where you combine science with job fit, you’d feel blind in going back to your gut instinct interviewing process,” Kulp says. He credits the process with more successful hires, an accelerated onboarding experience, fewer employee problems, and increased productivity and better service.
Administration is the second type of HR work. Payroll, legal compliance and employee issues are challenging to most franchisors. According to Mark Lettelleir, CEO and president of Modern Business Associates, “the goal of many franchisors is growth. Owners wear many hats and have great business experience, yet struggle to put important HR pieces in place. It can be overwhelming,” he says.
Modern Business Associates supports a number of HR functions, including payroll, benefits, compliance, legal employment processes, and HR strategic clarity. A number of other firms also handle similar functions for clients, often times for affordable prices.
Headhunters as partners
Recruiting is the third type of HR work. Even it has different activities, such as sourcing candidates (finding active and passive candidates), to operations (setting up interviews and getting offer letters out) to selecting (making sure you hire the right person).
One way to outsource this is to create a partnership with an outside recruiter who can manage the sourcing and operations parts of the process for you. Good headhunters will often partner with you to find creative solutions that match your budget. They may work on a fixed daily fee or spend a day or two a week in your office and really work as a member of your team.
What size company might do well to consider HR outsourcing? Lettelleir thinks if you have one unit, you can probably handle everything by yourself. But if you have multiple units and are experiencing growth, it might be time to reach out for some support.
Of course, there is one thing you should never outsource: employee relationships.
While KBP Foods outsourced many tactical HR activities, they never delegated that all-important relationship with the employee. This means KBP employees are assigned a trusted manager who can answer their questions, provide coaching and move them forward.
Their approach with recruiting is similar. While they use a host of third-party recruiters and vendors, personal offer letters are signed by an internal leader.
Back to Sport Clips. It’s only now, with 1,000 stores and almost 275 team members (including support staff and company-owned stores) that they are ready to hire a full-time, seasoned HR executive to bolster their HR support. For them, the time is right.
Is it time for you? What do you need from an HR perspective? It could be that you need to look outside for the HR and talent expertise that will position you for the future. The time just might be now.
Jeriann Kolton is principal at JAK Insights, a human resources consulting firm specializing in change management, performance management and organizational effectiveness. Reach her at (347) 228-1004 or www.jakinsights.com.