A 2006 study conducted by Cornell University associate professor Christopher Collins, Ph.D., in effect showed that small businesses could grow if they are more effective in managing their employees. As a small business owner and a Human Resource Generalist, I agree completely. That is one of the reasons I have been so actively supportive of strong employee management programs for small businesses, and why I developed EffortlessHR.
Professor Collins’ study showed that compared to companies who do not practice employee management strategies, those companies who do can experience:
22% higher revenue growth
23% higher profit growth
Over 66% reduction in employee turnover
Why is employee management so important? I will give you my thoughts, from my perspective.
I started out as a single person operation, a consultant. Many entrepreneurs start out as a single person business entity and many never want to change. They do not want to grow to the point where they need to hire employees. They do not want the bother. That is a whole other issue that we can discuss at a different time. For now, I want to concentrate on why I think have a strong employee management program is important and why I incorporated that type of philosophy into EffortlessHR.
Effective employee management understands what the job is, the type of individual that would fit the job and the company, empowering the employee to do the job, and treating employees with respect. You cannot be effective, however, if you are not organized. Therefore, the first step is to get your office in order.
Many business owners are so busy they put off filing (I know I have), or they put things in piles or in drawers, thinking they will get to it later. Later never comes and before you know it, the employee you thought was going to be a wonderful addition to your business opportunities is not really working out, but you can’t seem to find all the information on him or her. You have misfiled the application (if you even have one) or the resume. You may not have completed the paperwork on the reference checking so you may not remember what you discovered.
You may not even remember what job duties you discussed, training that may have been agreed to, or any number of important details. You know you did all this, but – where is the documentation? If you filed it, is it in compliance with state and federal guidelines? Can you easily put your hands on what you need, when you need it?
If you take the time to organize your files and keep information current and easily accessed, you have the start of an effective employee management system.
Small businesses especially must be more effective, because the affect a single person has on a small company is greater than the affect a single person may have on a larger company. For example, if a small business owner hires incorrectly, the time and training and effect on who handles the job is much more pronounced than in a larger company who have possible employees who can fill in until replacements are found.
In addition, by being better organized, you have a better understanding of the skills needed to do the job. If you understand the job, and you have hired correctly, then you can empower the individual to do the job without you standing there holding his/her hand. This frees you up to do other things. This also shows the employee that you trust them, which goes a long way in retaining good employees.
One of the reasons I designed EffortlessHR was to have a place small business owners could capture certain information about their employees in a simple and effective manner. It is like building a personnel file on line. All the information you need is there, you just have to enter it and use it. If you do, you will be a more effective manager and you will have an Employee Management System.
Being better organized will allow you to work on your business, not in your business.