SME Planned Recruiting is Strategic Recruiting

SME Planned Recruitment is Strategic Recruitment

     Strategic HRM is key to organizational growth. SMEs are watching every penny. Hence, it is imperative that HR functions are aligned with Business functions the first time. Recruiting is at the top of HR challenges in small, medium and large organizations.  Gaining and retaining top talent is essential. The costs associated with a recruitment selection can be more than a SME can risk. That includes that overall headache of a wrong hire. 

An analysis of the recruitment process must include:

*       advertising,

*       recruiting fees (if utilizing a headhunting agency),

*       total hours spent interviewing,

*       testing, and training new employee(s),

*       temporary employees hired to fill the position until a permanent hire is hired,

*       costs of salary and benefits paid to the new hired employee compared with those of the employee replaced.

     In addition to the above variables, a detailed job description is included. If a job description is in place, the current job duties should be compared with the position to determine if any job functions will be added or eliminated for the position of the new hire. (Example 1: Filling a legal secretary position in a law office, if the attorney assignments have changed or practice area have changed, same should be noted in an updated job description. Example 2: Filling a billing clerk position in a medical office, if the billing clerk is now required to open and/or close the office, same should be indicated in the updated job description. Job descriptions are very descriptive and have to be up-to-date. Failure to maintain updated job descriptions will result in complaints and even legal action.

(estimate) Annual (CpH)

Costs Included in CpH	Costs
Advertising and event costs	$1000
Online/Internet services costs (Costs to post job on Careerbuilders)	$1000
Recruiter costs	$1000
Referral bonus costs	$150
Third-party contracts and agency fees (Contract costs associated with paying Agency)	$2000
Applicant travel costs	N/A
Screening/testing costs (Hours and fees associated w/Interviewing, background checks, checking references, testing)	$500
Signing bonus	N/A
Cost-per-Hire Costs	$3800

(estimate) Individual Cost-per-Hire (CpH)

Costs Included in CpH	Costs
Advertising and event costs	$419
Online/Internet services costs (Costs to post job on Careerbuilders)	$550 (estimate)
Recruiter costs	$1000
Referral bonus costs	$150
Third-party contracts and agency fees (Contract costs associated with paying Agency)	$2000 (estimate)
Applicant travel costs	N/A
Screening/testing costs (Hours and fees associated w/Interviewing, background checks, checking references, testing)	$500
Signing bonus	N/A
Cost-per-Hire Costs	$4319

The cost vary (annual/individual) according to what recruitment process is selected. The above calculations are estimates. Do the above appear expensive? Figure the above costs -in addition to- the costs of temporary employees, stress of incompatible hires and recurring costs. 

HR Metrics measures costs that are strategically planned, which in turn make the CpH an investment, instead of an unexpected expense!

Until Next Time!

April D. Halliburton, President

All-4-HR & Business Solutions, LLC

http:www.all4hrbiz.net

Linking HRM Practices to SME Performance

     It is more than evident the greatest challenge of small- medium-sized enterprises (SMEs) is human resource management (HRM) and how to effectively manage their workforce. Essential to achieving organizational growth is the ability to link HRM strategies with business strategies. HR practices tend to be fairly ad hoc. But remember the old adage – no one plans to fail; only fail to plan.  You understand my point. 

      No longer is it effective to throw caution to the wind and hope for the best. Strategy is key to managing an effective workforce.  Some researchers that conduct empirical studies do so for an understanding of how HRM practices connect, promote and ensure organizational performance. Attempts to explore the link are numerous and still growing. 

     Variables that mediate the link between HRM practices and firm performance are absenteeism (employees’ behavior), commitment or satisfaction (employees’ attitudes) and quality or productivity (employee’s performance). Researchers conduct empirical studies to discover the link between SME HR practices and the above variables: employee behavior, employee attitude or employee performance. While HR practices do not influence firm performance directly, a causal chain of effects in the application of effective HR practices is a win-win concept for your organization. The challenge is identifying measures of financial performance that sufficiently reflect survival chances in terms of SME health and long-term success.

    Key performance indicators (KPIs), i.e. (training, and development) influence the performance measures. Performance measures are the end results of KPIs.

Example: Your Company is a distributor of medical instruments to private doctor offices.  Problem:  [Clients are receiving orders after the expected return dates. Other client complaints include: incorrect volumes of instrument, incorrect instruments, etc. Currently, the company is utilizing order forms that are over 10 years old and have not been updated. Sales persons are in some instances submitting handwritten orders, and forms that (are not only out-of-date) but not properly or completely filled out before submitting to the product department.

Result: Dissatisfied clients, loss of clients, loss of revenue.

Solution: Company reorganizes the sales force and product department, implementing up-to-date order forms and invoices. Further the company implements a new training and development programs for new and current employees training all employees on NEW procedures for full and completely filling out order forms making order forms mandatory.                                                                                                                                                

The bottom line is when SME link HRM practices with firm performance, it is reflected in the attitude of the employees, customers and finances. The above represents a plan utilizing KPIs (training and development) and performance measures (improved client relationships, employee morale, and increased revenue).

Until Next Time!

All-4-HR & Business Solutions

April D. Halliburton, President

Capella University Organization and Management PhD Candidate

Boosting the SME Grade with KPIs

Boosting the SME Grade with KPIs

In SMEs, there is a constant tug of war regarding effectiveness, accountability, human capital growth financial growth. As with large organizations, it is important for SMEs to gauge, benchmark, gauge again and benchmark again. How many SME human resource professionals or SME owners utilize business scorecards? How about HR scorecards? The key to achieving organizational growth is utilizing the numbers to make informed decisions. I have talked about the numbers, HR metrics and now KPIs and scorecards as they remove the guess work from assessing your organization’s current and future position.

As and SME owner, do you wonder what do these tools mean for my SME? Are these effective tools for my SME? You are never too small to grow! Strategic growth entails utilizing tools to make calculated decisions regarding all aspects of business. This also involves utilizing HR tools to make informed calculated business decisions and HR decisions. Successfully growing your SME will require aligning your business scorecard (BSC) with your human resource business scorecard (HRBSC).

Utilizing these tools will set the stage for building an impressive financial wherewithal in your SME. Key performance indicators (KPIs) are numbers that when applied to a HR scorecard, it reveals the current stance of your employee performances. They are key to assessing the current performance management system, if one is in place, as well as gauging needed changes, if necessary. KPIs are also key to assessing if your current employee performances are effectively facilitating your SMEs’ growth.  

Key Performance Indicators (KPIs) are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization. They will differ depending on the organization.

*  SMEs can identify a KPI as the percentage of its accounts receivables derived from return customers.

*  Student graduation rates can act as a KPI for a school.

 *  A KPIs of an organization’s overall customer service 

         department can involve the percentage of customer calls 

                                    answered within the first minute.

                                       * A KPI of a social service organization may be the 

                                             number of clients serviced during a year.

Developing (KPIs) is an essential way to assess your SMEs current HR position, as well as gauge how and when changes should be made to the company’s HR system. Setting KPIs must be relevant, readily available, holistic, clear, simple and understandable, and will work. More importantly, KPIs must be aligned with an organization’s goals.

The numbers derived from a KPIs are one of many strategic tools that will ensure as a SME, you will assess your company’s current position and gauge your HR department’s course of action.

Look for All-4-HR & Business Solutions online seminar: Boosting the SME Grade With KPIs on Wednesday, October 30, 2013.

Until Next Time!

April D. Halliburton, President

All-4-HR & Business Solutions

Organization and Management PhD Candidate

References

Garengo, P., & Biazzo, S. (2012). Unveiling strategy in SMEs through balanced scorecard implementation: A circular methodology. Total Quality Management & Business Excellence, 23(1), 79-102. doi:10.1080/14783363.2011.637800

Manville, G. (2007). Implementing a balanced scorecard framework in a not for profit SME. International Journal of Productivity and Performance Management, 56(2), 162-169. doi:http://dx.doi.org/10.1108/17410400710722653