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Putting people first
Putting people first



When entrepreneurs set themselves up in business, employment issues don't tend to be topmost in their minds. Ensuring that there's a market for their goods or services, worrying about production, or securing finance usually loom much larger. But it doesn't take long before human resources (HR) matters start to become an issue.

 

HR issues begin to arise when the business's founders consider taking on their first employees. Employing somebody is a big step, not least because you need the means to pay them every month. But it's also an early step in making the business more complex.

 

Indeed, small business lobby groups complain that recent developments in employment law are making this area something of a minefield for small and growing businesses. The Federation of Small Businesses (FSB) has revealed large increases in the past two years in concerns about such areas as age discrimination, information and consultation, treatment of part-time workers, pensions and retirement.

 

Employment law is, says Alan Tyrrell, the FSB's employment chairman, "vital to ensure that both employers and employees know where they stand and to protect both parties as they carry out their work".

 

But, he adds, the complexity of these laws is placing "an intolerable burden on smaller firms that are not big enough to have their own HR department".

 

He continues: "The average small business owner spends 28 hours a month filling in government forms."

 

This burden is seen as a key disincentive to growing businesses to take on the staff they need to continue to develop. There's anecdotal evidence that many firms curtail their expansion in order to avoid taking on extra staff.

 

However, it doesn't have to be that way. While acknowledging that few small businesses can afford a full-time HR manager, experts in the area advocate, at the very least, putting a senior manager in charge of ensuring that areas such as training, health and safety, pay, and staff communication and motivation are covered. "Personnel issues are too important to leave up to chance," says one.

 

This still means that someone has to deal with the details of pay, training and the rest, but modern technology can help in this area, just as it does with finance and other specialist functions. Various businesses and industry groups have begun to offer HR support via the internet on everything from hiring and firing policies to payroll services. Such developments can undoubtedly help make taking on relatively junior people less risky in terms of possible violations of employment law, but they won't help business founders deal with an issue that can be even more troubling. This issue is taking on senior people to reduce the burden on themselves.

 

The history of entrepreneurial businesses is littered with examples of companies that have taken on senior personnel, only for the founder to be reluctant to let them do what they were hired to do. But if they don't take this step and acknowledge that other people may possess skills that they, themselves, don't, they are less likely to prosper.

 

Jessica Seaton, who founded the clothing business Toast with her husband a decade ago, summed up the dilemma when she told Accelerator, the new magazine for entrepreneurs: "You have to delegate if you're going to grow, working with others rather than thinking you're the only one who can do it. It's a leap of trust."


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