Human Resource Planning: 17 Tips for Scaling Your Business
What’s your most important asset?
Your employees, of course. They are your human resources, your human capital.
And, without planning, they can be a bit like herding cats.
Whether it’s hiring, recruiting, training, orientating, onboarding, or providing benefits, planning your human resources is challenging. Now throw in a growing business and the need to scale for it.
That’s where this list comes in.
1. Plan for staff growth.
Maybe your business started out with just two on staff. Then four. Someday, hundreds.
Plan now. Think of the specific tasks and jobs that are going to be needed. Write down the jobs (and descriptions) you think you’ll need now. Decide what order you’ll need those jobs to become a reality.
Sure, things might change and you’ll have to tweak those plans. Yes, early on you’ll have to cross-train your staff so fewer people can cover more of those jobs. But you should set up a plan that has benchmarks that indicate when a new position is needed.
Maybe that benchmark is a specific number of customers, or a certain sales volume. Maybe when customer complaints or support wait times reach a particular level you know you need to add to staff. The point is to have a plan of what comes next in terms of human resources, and delineation as to when that plan kicks in.
2. Regularly assess your current workforce ability.
Assessment is the foundation of pretty much anything else we’ll be talking about in this post.
It’s important to assess your workforce regularly, because it’s the only way you’ll know what you have, what you need, and what is changing both in your actual workforce and also what is changing in your industry that your workforce needs to adjust to.
Things to assess might include:
- Current employee skills and abilities. This includes technical, knowledge, interpersonal, and leadership.
- Trends spotted in employee reviews. Any trend is worth paying attention to, whether positive or negative, particularly responses regarding training and ability to do the job before them.
- How your competitors compare. Find successful competitors, and consider how your workforce compares to theirs in terms of capability (skills, knowledge, training).
3. Cultivate talent to align it with your business’s vision.
Employees have inherent talents, but you need to encourage it to grow.
In 2008, ConAgra studied the performance of both trained and untrained employees to determine what kind of effect training had on them. They learned that managers with training had half the employee turnover than those who did not receive any training. That discovery led to better training and the numbers to back up the cost of paying for training.
When it comes to scaling your business, you should know what direction you want to see it grow. Train and cultivate the talent of employees to meet take it in that direction. Looking for leaders? Provide leadership training. Looking for better customer service? Provide customer service training.
4. Plan for internal management succession and transition.
As your business grows, you’ll also see your need for management to grow.
Ideally, if you’ve been training your employees, you’ll have a good pool of potential managers to draw from in your own workforce so that succession and transition aren’t as jarring.
Your plan should include things like:
- Having a system that identifies employees with management and leadership abilities.
- Identifying personality and interpersonal strength and weaknesses in potential leaders.
- Knowing what your employees career goals are, and pinpointing those who wish to manage.
- A known system that alerts employees to the fact that they have the possibility of promotion and being a manager some day.
- Establishing training for management techniques, as well as decision-making techniques.
- Normalizing communication with employees regarding changes in management and other similar decisions that have an effect on them so they are used to being involved in such moments.
Not all of your management needs will come from within your growing business, but scaling means you’ll want to tap into those employees who have been with you from early on and who know your business better than a newcomer.
5. Improve your hiring process now.
Getting your hiring process perfected when you are still on the smaller side is best.
This might include:
- Talking to current employees about the hiring process and what they liked or would change.
- Being serious about exit interviews and finding out if the hiring process was misleading and led to turnover.
- Improving the process of letting potential employees see what your work culture is really like before they sign on.
- Improving tools that assess whether an employee is a good fit for both the position and your business’s work culture.
- Improving how you advertise for job openings, both in the copy you use to describe them as well as where you place job advertisements.
Hiring new employees is extremely time consuming and expensive. You want that time and money well-spent. There will be no magic moment where, as your business grows, that your hiring process smooths out and gets better on its own. The whole point of being aware of scaling is to consider that your successes and failures scale to the same degree as your growth. If your hiring process is is in turmoil, that’s only going to increase to the same degree as you grow.
6. Be ready to set up an actual human resources department.
Smaller businesses often do not have an actual human resources department, and they may function completely fine without one.
Larger businesses, however, do not have that luxury. Remember, HR departments are dealing with benefits, training, and interpersonal relationships. The larger your business and the more management layers grow, the more disconnected or distant your employees can become from those making decisions. Even if your HR department starts as one dedicated employee, be ready to start it.
7. Budget for human capital issues.
Your employees are your most important asset. They are your human capital.
Be sure you’re budgeting not just for business expansion, but also for employee growth, too. That means considering benefits, expectations of employees, and workplace culture.
It’s not terribly complicated, but remember: if it isn’t in the budget, it isn’t going to happen.
8. Get your best practices in line with your actions.
Most businesses have best practices, but they don’t always do so great on the actual follow-through.
For example, you may say that team collaboration is a best practice, but you have actually incentivized individual rewards. Or, you reward employees on a quarterly basis but only do performance reviews twice a year.
When your best practices are out of sync with your action, you will fail to meet the goals that the best practices are meant to achieve.
9. Perform a gap analysis.
A gap analysis is where you locate current gaps in what your business has and what it currently needs. It’s a bit different than regularly assessing your actual employees. It takes other things into consideration that actually affect your employees
- Job descriptions. They should accurately reflect what the jobs are. Their accuracy, both in description and expectation, has an effect on employee retention.
- Current tools employees use. This includes all tools, from computers in offices to kitchenware.
- Employee benefits. This includes such things as retirement funds, health insurance, sick days, vacation days, and any other items your employees generally receive.
A gap analysis takes into consideration where your company is at now. It’s pretty common for a business to set their policies and benefits and not realize they are outdated in a few year’s time. Over time, your business changes. It grows, it needs to scale, and it needs to attract and retain great employees. A larger business, for example, can probably afford better benefits. You can’t rely on what you set up in the early days, and a gap analysis is set to specifically pinpoint what needs changing.
10. Embrace analytics.
Data is your friend.
It’s found everywhere, from employee interviews to your accounting department. The problem is that if you don’t make an effort to collect data regularly and with a consistent reason, that data goes unused in a file.
Knowing the numbers for what is happening in your business is the best way to make informed decisions. When it comes to human resource planning, you’ll want data on:
- Productivity. Are your employees as productive as they were when you were smaller? Is productivity scaling correctly with your business growth?
- Retention. Are your employees staying or leaving, and at what rate? What direction is this trending?
- Managerial effectiveness. Are your managers effective or causing problems with how they lead employees?
- Benefit costs. Are your benefit costs in tune with goals and budgets, or are they overwhelming your profits?
- Training, recruiting, and onboarding expense. Are training expenses as you expect, or have they become more than you bargained for? These costs will be closely tied to retention and hiring.
Tracking analytic data on human resource-related issues is the only way to take the guesswork out of whether or not scaling your business will be a nightmare.
11. View your human resources from the customer’s view.
Take an outside-in approach to viewing your employees.
What kind of experiences are your customers having as your company grows? You want to be sure to look for areas where business growth can damage a great customer experience, such as:
- Personal interaction. Are your customers still having a personalized experience with your employees, or is business booming so much that your employees are trying to juggle too many customers at once?
- Customer support. When customers have questions or complaints, are your employees able to keep up with the increased demand?
- Service or product selection. As your business grows, are you adjusting what you offer to fit a growing and changing customer base?
- Knowledge of services or products. Do your employees have the necessary knowledge of what your growing business offers customers, or are their knowledge gaps?
Are your human resources where they should be? Are they ready to be what they’ll need to be for future customer needs?
12. Make the book, and then go by it.
You can’t “go by the book” if you never created one.
As a small business, a slim employee handbook and a casual approach to guidelines as rules might have worked. But as your business grows, your need — in writing — more to the plan.
An employee handbook that is as detailed as needed provides consistency. No employee feels as if they are being treated unfairly if the handbook is followed.
Using the assessments and other tips in this post should help you know to adjust your employee handbook. Reviewing your employee handbook at least once a year (preferably more) is ideal, and if changes are made, you will need to bring all of your employees together to inform them and get them to sign off on the new book.
13. Get used to relating to your employees differently.
Early on, you may have had more personal interaction with your employees because your business was smaller. As it grows, though, that interaction changes and lessens. You might not even realize that there are some employees who are used to more communication with you but aren’t getting as much of it since you are busy as usual.
The problem is that even if you feel like you’re just as busy and just as communicative, you have employees who are growing distant from you. So while you may not have needed formal staff meetings or communication in the early days, a business that is going to scale has to adjust for a different approach to communicating.
It might seem silly, but start with staff meetings when you are still small. Get staff used to the idea. Small staff meetings can scale to department or large staff meetings. Daily one-on-one conversation with every employee, however, does not scale.
14. Have mid-range employee goals.
Growing your business means you have a big goal, and you are pushing for it.
That’s true enough. But the middle of that growth process requires mid-range goals.
Long-term vision and goals are at the opposite end of the playing field from where you started, but there’s a lot of game play between one end to the other. You need the structure of goals there, too.
Create goals for human resources for that middle time. These tend to be plateau or benchmark goals that indicate a step in the right direction or that trigger the next phase of a plan. Perhaps you want to see 100% of your employees trained in a specific skill set, but might set a goal of 50% during the fast growth period. Or maybe you’d like to see all of your employees hit a certain sales or productivity level, but it’s too difficult to get them all there while you’re in the growth process of hiring and onboarding, so you set a mid-range goal that helps you move forward without abandoning that larger, future goal.
15. Find a mentor.
Scaling your business can be scary, particularly when dealing with human resources. Find other business owners who have already done what you are in the midst of, and see if they won’t mentor you.
16. When it comes to your top leaders, clean house.
If you have top-level management that are creating a problem now, they are certainly going to be just as difficult (if not worse) later.
Are there personality clashes? Leadership issues? Ethical or trust issues? Anti-authority problems? Are they able to self-start or do they need you to micromanage them or give them detailed instructions constantly?
And not only that, but your team of leaders needs to be…smarter than you. That’s how you grow.
17. Know when you need to subtract.
The idea of growth necessarily brings to mind adding things.
Adding sales, customers, employees. Growing.
But scaling also means knowing when to subtract. There are processes (and even job positions) that you may have needed earlier on, but which now are slowing you down. It is critical to be able to look dispassionately at some business traditions and positions and determine which ones have no place in a growing business.
Do you see a common theme running through these tips?
It’s all about planning ahead now, before your business gets too big to make changes. Remember: scaling magnifies the foundation. You can scale the good or the bad just as easily.