Entrepreneurs and business leaders are working hard and putting in long hours to secure funding, hire talent, and grow revenue. However, it’s important to ensure your business also attends to its workforce strategy especially during periods of rapid growth. Creating policies and procedures for your workforce enables businesses to sustain growth. Startup companies and other small businesses face many HR challenges when it comes to finding, hiring and retaining great people and even firing poor performers. Another human resource challenge that often presents itself with growth is keeping up with compliance requirements. 

There are many reasons why your business could falter in the face of rapid growth. According to one study, 23 percent of small businesses fail because they don’t have the right team in place to get the job done. That’s a problem that can be easily solved with a HR strategy or solution in place to manage human resource processes. Your business needs a roadmap to successfully navigate through the shifting HR priorities, challenges, and tools needed at each stage of growth.

Discover the biggest HR challenges for high-growth businesses and what you can do to increase the efficiency and effectiveness of your human resources.

Signs your business needs to focus on new HR approaches

When small businesses go through a growth spurt, it’s crucial to get serious about HR. According to SHRM, business leaders should be ready to recognize when it’s time to formalize or expand HR responsibilities; identify and plug gaps in HR approaches; strengthen communication between managers and employees; and maintain compliance with employment laws and regulations. 

If your business runs lean, it’s easy to think you can’t afford to hire HR staff or purchase software to automate processes. However, it’s important to solve the HR budget challenge quickly or risk declining employee morale, increased team stress, and potential people management, payroll or compliance errors throughout the company. 

To effectively scale your business, be prepared to meet these HR priorities at different stages of organizational growth: 

• 1 to 15 employees: Hire the right talent; look for employees that align with your vision and can adapt to the speed of change. 

• 16 to 49 employees: Formalize HR policies and processes; develop an employee handbook and put policies in writing.

• 50-149 employees: Maintain compliance with employment law regulations that now affect your business including FMLA, EEO-1 Reporting, and other applicable state laws.

• 150-500+ employees: Focus on strengthening your employer brand, company culture, and employee engagement.

 

 

Common HR challenges for businesses of all sizes

Business leaders have numerous solutions available to help solve their current HR issues as well as those they will encounter during their next stage of growth. Whether you’re a small startup looking to outsource HR or a growing business ready for an in-house human capital management (HCM) solution, your business must be prepared to: 

Relieve administrative burden. As your business grows, manual processes become unsustainable. Even Excel spreadsheets require a large amount of manual intervention and are prone to error. Automating your human resource processes can simplify applicant tracking, onboarding of new hires, benefits enrollment, reporting, and compliance. Additionally, HCM solutions offer employee self-service which minimizes manual-based paper processes for whoever manages your human resources.

Preserve company culture. Most businesses have core values that shape the organization. As you grow and hire new talent, Harvard Business Review notes it’s important to define those values in clear, observable behaviors. For example, if respect is a core value, urge employees to: 1) be great listeners and 2) give equal consideration to different ideas. A well-designed HR strategy can address and prioritize your culture message as you tackle your talent challenge. Use online training, all-hands trainings, and effective communication to reinforce culture.

Improve recruiting. When you’re in high-growth mode and desperate for help, it can be tempting to simply fill positions with available bodies. However, it’s important to ensure the right people and systems are in place to drive success and continue building an innovative business model. It’s also important to emphasize brand and value proposition throughout your recruiting efforts and onboarding processes.

Strengthen employee morale. Keeping employees happy is a huge challenge. Business leaders need to work with the HR team (if they one) to create a great work environment—one that focuses on employee health and wellbeing, fosters trust, and values honesty. Statistics continue to show that happy employees are about 20 to 30 percent more productive than unhappy workers.

Manage compliance requirements. Federal and state regulations are complicated and constantly changing. That’s why many growing businesses use HCM solutions to ensure requirements are met, from registering with the proper agencies to meeting federal, state, and local rules and ensuring the proper forms are on file for each and every employee.

Meeting employee demand for benefits. It can be difficult to keep up with the benefit offerings of larger companies that you compete with for talent. You’ll need to emphasize the great unique qualities of your small business as well as its culture and opportunities as you recruit potential candidates. At the same time, do all you can to improve benefits availability and administration to attract and retain top employees. Growing businesses need to find ways to enhance their benefit packages by offering modern perks and effectively managing costs.

Beat growth challenges at every stage 

To get to the next level, businesses need the right tools to minimize complexity and drive growth. Many businesses use HCM software to simplify HR administration, find and retain the best talent, and manage the entire employee lifecycle.

Business owners and entrepreneurs can use workforce data to predict workforce needs, support growth and talent development, and improve performance. With the right HR strategy and tools in place, your business can build a great workforce with skilled people who get the job done and will grind it out to take your company to the next level.