“If you don’t know where you are going, you’ll end up someplace else.”- Yogi Berra

“It takes 20 years to build a reputation and five minutes to ruin it” – Warren Buffett
December 23, 2019
Human Resources Management: The Strategic Factor of Business Productivity in SMEs
January 28, 2020

If you were going to build a beautiful house, would you ask the carpenter to just go build what he wants? And just hope he’ll build something that you’ll like? You would create a plan, you’d assemble a budget that would outline the costs, and you’d agree on some deadlines and milestones, right?

The same principle applies within organizations. Companies that plan ahead have a clear advantage over the ones that decide to do things without planning. The unplanned technique of "do whatever you get in your head,” in the business world can be costly. When setting the goals you want to achieve, have you considered which route to take? Have you analyzed the costs, the time required, what any required hiring process will look like, and how those decisions will impact your team's engagement and motivation?

Best practice companies typically engage in a strategic planning process starting as early as the previous summer, to be sure to start the new business year in a productive manner. But if that hasn’t happened, it’s still very early in the first month of the new year, and there’s no time like now to get moving. This is why it is important to consider 3 questions:

1. What should we improve upon from the previous year?

Only by identifying the company's problems and collaborating on how to address them can we really move forward.

2. What challenges await us this year?

It is essential to analyze the future of the sector. We need to know what changes, events or activities will occur in the coming months and years and how they can influence the ability of our business to progress, and be ready for them.

3. Which company issues need the most attention?

After analyzing the current situation, we should look at ourselves from an HR perspective and determine the state of the company from a staffing perspective in order to find solutions. For example, is there a High turnover rate, or a Lack of motivation among the employees?

A pretty common problem, especially in small companies, is the lack of involvement and understanding of responsibilities at the operational, administrative and even managerial levels, which can easily compromise work performance.

Research shows that small businesses have many problems in human resource management and in the field of training and development; in many cases they don't even have an HR professional. Research conducted by F. Núñez de la Peña at Mexico’s ITESO University, detected the following problems typical of small companies: demotivation, job insecurity, layoffs and reduced revenue.

In regards to satisfaction and productivity, it was found that large companies (with more than 250 employees) had moderately more satisfied workers proportionately than small companies (with less than 50 employees). The main factors of dissatisfaction in small businesses are:

  1. Bad treatment by the boss;
  2. Poor work organization;
  3. Economic factors: wages and salaries and other forms of compensation;
  4. Psychological conditions of work: high turnover rate, employee treatment and recognition, and types of supervision;
  5. Position and tasks performed: working conditions (time, shift, day), and uneven distribution of work tasks.

It is undeniable that companies are constantly in an evolution process, facing opportunities and threats. For these changes, HR plays an important role in business strategy, both in guiding the change management necessary when applying new processes and in drawing up plans for success.

But how to properly manage Human Resource challenges? This needs to be addressed when you create your part of the company's STRATEGIC PLAN for 2020.

Need help getting started? Contact us to discuss how we can help you create an HR strategic plan.