HR toolkit: what HR tools do growing businesses need?

What is HR?

Human Resources, known more commonly as HR, covers many key aspects that are important to running a business, such as:

• paying staff
• organising training
• monitoring compliance
• managing health and safety

HR includes all the processes and functions that look after employees and allow a company to operate smoothly. Larger businesses are likely to have their own HR department, while small businesses should employ at least one person to manage human resources.

A good HR process increases the chances of having efficient workflows and happy staff. Getting it right can also help a company to grow and win market share.

What is the employee life cycle?

The employee life cycle model shows the key stages someone goes through when they work for your business.

It’s sometimes split into four, seven, or eight stages, but the most common version has six:

1. Attraction

This stage happens before you invite someone for an interview. It’s a combination of making the role and company sound appealing to prospective employees and amplifying this message to a wide audience.

2. Recruitment

Covering adverts, interviews, and job offers, the recruitment stage is crucial if you want to fill your vacant roles with the best candidates.

During this stage employers should consider the little things that can make a big difference, such as making sure you reply promptly, giving lots of detail, and leaving room for prospective employees to ask questions.

3. Onboarding

A good onboarding process can help new employees to settle in easily and add value to the business quickly.

As well as showing them how they can perform in their role, you’ll need to immerse new employees in your company culture and values.

Read more below about recruitment and onboarding.

4. Development

Once a member of staff has settled in and passed their probation period, focusing on their development has clear benefits for all parties.

Encourage staff to take courses and attend events, while also prioritising goal-setting and regular check-ins with managers to monitor progress and overcome obstacles.

5. Retention

This stage is very important if you want your business to thrive. The longer employees have been working for you, the more effort you’ll need to put in to making sure they’re satisfied and feel like they can still develop in their role.

Read more below about how you can improve retention rates through employee benefits and workplace culture.

6. Separation

Of course not all employees are going to stay with you forever, so you need a process in place for when people decide to leave.

Running exit interviews is a good way to get feedback about what your company does well and where there’s room for improvement. You’ll also need to make sure that the employees who remain have the support they need to continue as before.

What is CIPD?

CIPD stands for the Chartered Institute of Personnel and Development. As HR becomes more prominent in your business, you might be wondering whether a CIPD qualification is necessary for your HR professionals.

While a CIPD qualification isn’t a legal requirement, it is the recognised standard for people professionals in the UK.

They offer courses that help the development of HR professionals, varying from entry-level to specialist.

There are three levels of qualification: level three, level five, and level seven.

And at each level, there are three types of qualifications: certificates, diplomas, and awards. Certificates centre around essential HR topics, diplomas cover a wide range of topics in-depth, and awards cover one section of a diploma.

Many businesses ask for CIPD qualifications when hiring HR professionals. You might want to offer CIPD training to your team as part of their continuing professional development. And as your business grows, a knowledgeable HR department will become a great asset.

Have a look at the CIPD website for more information on the options available.

HR audit checklist

Below we’ve put together an HR checklist for businesses. It covers all the main areas of HR that your business needs to consider.

Recruitment and onboarding

This is a key area when it comes to making sure you have the right people in the right roles, and is especially important if your business is expanding.

Read our article on job descriptions to make sure your adverts for new roles cover all the right areas.

Other parts of the recruitment process you’ll need to think about include:

• applications
• interviews
• job offers

Once new recruits have accepted a job offer, you’ll need an onboarding process in place to make sure they settle quickly.

A key part of this will be sharing your staff handbook with them, alongside putting them through an induction, introducing them to stakeholders, and making sure they have all the equipment and tools they need to fulfil their duties.

Contracts and remuneration

Having the right contracts in place and making sure payment of employees runs smoothly should go hand in hand with your recruitment and onboarding process.

There are lots of employment laws that you need to comply with, while at the same time having payroll software can help you to pay staff on time.

Disciplinary and redundancy

When you hire staff, you won’t have issues like redundancy and employee discipline in mind. However, you need to have clear processes in place so you’re covered in the event things go wrong.

If you plan to make someone redundant you’ll need to make sure you follow a range of steps, including giving employees a right to appeal, serving them with the right notice period, and sending out a series of letters.

At the same time, your company’s disciplinary and grievance procedure will outline the behaviour you expect from employees.

Employee benefits and workplace culture

Another important part of the HR process is keeping employees happy and encouraging them to stay for the long term.

This is known as employee retention. The more employees enjoy working at your company, and feel it’s a place they can develop, the higher your employee retention rate will be. On the other hand if staff aren’t happy and feel their problems aren’t being addressed, this could lead to a high turnover of employees (also known as a high employee churn rate).

Read our guide to employee retention for some tips on how to measure staff happiness and strategies to improve job satisfaction.

One of the key strategies is offering appealing benefits and rewards, such as:

• bonuses
• healthcare schemes
• discounts for gym memberships
• a cycle to work scheme
• healthcare and pension plans

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All of these HR processes contribute towards your overall company culture. The culture of your company should sum up what you’re all about, how people act and interact with each other, and encompass the purpose of your business.

It’s likely to build on your company mission statement or the values that you set out when you first started.

Your culture could focus on something like innovation or sustainability. It could also promote a way of working such as the agile methodology.

Most of all your company culture should be something positive that all employees are proud of and strive to maintain.

Employee performance and appraisal

Alongside making sure employees are happy and settled, you’ll also need to track their performance.

If staff aren’t performing to the best of their ability, this could affect results and also lead to some disciplinary issues.

One of the most effective ways of tracking performance is through regular appraisals. These will often take place annually, although they can be carried out every three or six months.

Appraisals give you the opportunity to discuss feedback, achievements, development, and suggested improvements. They also allow staff to tell you how they’re feeling and raise any concerns they have.

Read our guide to staff appraisals for more information on what you need to do. We’ve also got a free downloadable appraisal template to help you plan your meetings.

More useful articles for small business owners

• How to do a competitor analysis
• What is good customer service?
• Small business cyber security – everything you need to know
• The Bradford Factor – how to keep your business moving
• How much employers’ liability insurance do I need?

Do you have any HR tips for growing businesses? Let us know in the comments below.