Updated: Mar 22
Increasingly small and medium-sized businesses are without a formal HR function.
Some of these organisations use Non and Executive Directors, Consultants and Specialists and some don't opting instead to recruit great people managers or up-skill those they have, whilst investing in HR technology to aid both their management and employees. Especially, technology like iDriveHR, that provide free access to HR and legal practical support, learning and templates.
It's not just SME's either that are re-looking at re-shaping how they recruit, retain, manage and develop their people. CEO of Octopus Energy, Greg Jackson has a distaste for command and control that comes with a centralised HR or IT department https://www.bbc.co.uk/news/business-56130187. Instead, he opts to have some specialist roles and push out those accountabilities to the business leaders, managers and employees themselves, believing more in self efficiency and self accountability, over creating a department that controls these activities. "Go Greg" is what we say!
So from small teams, to larger organisations the concept of not having a HR department is ever more present.
Not only does this reduce substantial amounts of cost, it creates opportunity for the organisation to break tradition and forge their own way forward.
If we just look at the Pandemic, it was the SME's that were able to flex quickly. In today and tomorrows world, all businesses need to be nimble and flexible – perhaps having a HR department slows down the organisation?
Studies of the business habits of SMEs think that those with a HR department could learn a lot from smaller firms. At the end of the day its about making sure you have the right people, for the right cost at the right time, who can do the right things! No business, can afford to carry people and particularly those in roles that don't add value to the bottom line.
Whilst SME's might not be able to compete yet on salary and benefit, they can compete in terms of values and cultures, relationships with other people and networks, especially when using the right technology aids.
“Smaller sized organisations have less excess and flexible policies. In contrast, large firms are hindered by their standardised processes and global sprawl and lack of personalisation.
HR working at its best is not 'HR roles', its helping people work together for the common goals, whilst putting in place the right protection and measurement for the benefit of all and helping people reach and become their best self. The only way to do this is to fully integrate strategies, methodologies and build this into daily activity of every role within the organisation.
If you want to read other's points of view try this blog by Andrew M.
It's all well and good not having a HR department, but SME's and larger organisations must ensure that they have in place substitute guidance and the ability to create relevant governance material such as policies and procedures, if they are not to create crevices they can easily fall down.
Things that can go wrong not having those with People Management and Development skills can include:
Shortfall in procedures or processes so people making it up as they go along.
Firing people in a fit of anger/frustration
Unfairly applying treatment that causes dispute and upset
Communication problems both verbal and written
Inefficiencies in the work arrangements because of lack of clarity
Missed opportunities in development and succession
Practices that are discriminatory
Misunderstandings and incorrect financial reporting
Business success is dependent on how organisations behave. Perceptions matter. How they are internally and externally perceived and the impression of their brand.
CAN WE LIVE WITHOUT HR?
Yes! Of course we can. However, we must do so sensibly and responsibly.
By putting in place the right protection, systems and methodologies, and sharing accountability so employee rights are upheld and not infringed and employees can thrive, people management and development, does not need to be a thing that sits separately.
Having No HR doesn't need to be chaos! Just ensure you have great technology that helps you onboard, manage, develop and retain all your employees. Most importantly, it helps managers do what is required and helps their development and accountability too!