In the observations they had collected from interviews, firstly, entrepreneurs are not afraid to share their enterprises and importance of people to their own success. Secondly, they possess natural and active aversions towards paperwork, restrictions, procedure and summarily any activity that doesn’t add perceived value to their undertaking. Thirdly, they learnt that discipline and organization is attracting, however, retaining, motivating and training will advance their businesses. 4 overarching demands that Human Resources functions must meet to be successful are hiring quality people, generating immediate performance and productivity, maintaining flexibility and HR cost containment.
“HR Challenge # 1: Attracting a Large Pool of High-quality Job Candidates
It is difficult for entrepreneurial firms to attract high-quality candidates because they are reluctant to spend too much on recruitment and their compensation does not compare to the well-established companies. This problem can be solved by emphasizing the non-monetary benefits of working at their company such as the entrepreneurial culture, team environment, open door policies and potential of growth and promotion. Furthermore, entrepreneurial firms can search for acceptable candidates through strong personal and professional networks, trade associations, universities and “word of mouth” from employees.
“HR Lesson # 1: Firms need to develop more formalized, non-traditional channels for employing and offer enticements to candidates that go well beyond simply wages and benefits.”
“HR Challenge # 2: Speed in the Hiring Process”
It would be hard for entrepreneurial firms to hire high-quality job candidates if they want to speed up the recruitment process. In order to fill the empty job positions swiftly, these firms might select unsuitable candidates for the job. In the long run, it wouldn’t be a great idea because this person might not have the appropriate personality for this position and will not bring out the best performance. “HR Lesson # 2: Entrepreneurial organizations must have the discipline to develop recruiting and selection systems capable of moving quickly while still selecting high quality personnel.”
“HR Challenge # 3: Taking Time to Properly Orient and Train Personnel”
Entrepreneurial organizations are unwilling to spend too much time to train and orient new employees properly because of the time, effort and cost. This leads to chaos, confusion and pressure on the employees. These new employees would not be able to perform at a high level and must either “sink or swim” during unfamiliar situations. Appropriate orientation and training is significant because they learn about the company’s background and how they operate. Furthermore, with proper training, new employees can be more successful with their positions and perform tasks professionally.
“HR Lesson # 3: Proper training and orientation of employees helps them to become more productive in a shorter period of time than employees that are simply thrown into the heat of battle.”
“HR Challenge # 4: Properly Coaching and providing Feedback for New Hives”
Proper training and providing feedback can prevent new hires from falling into bad habits such as taking shortcuts, which can be a challenge to correct. Continuous supervising and providing comments can be time-consuming and expensive but there are many advantages. For example, lowering performance anxiety raises overall job satisfaction and provides a higher level of motivation and commitment that would be costly to create simply through higher wages. Furthermore, the learning process and performance level would be improved quickly.
“HR Lesson # 4: Productivity and performance is increased by providing employees with ongoing coaching and performance feedback.”
“HR Challenge # 5: Developing Workforce/Management Talent”
There are more demands to meet when a business starts growing. Even though leaders like to be the main decision maker, they won’t be able to take care of all the demands. Therefore, they have to share this decision-making responsibility. These leaders need to constantly promote employees and assign more responsibilities to them over time. However, those leaders who don’t do so would have inadequately trained and under-skilled employees where they would have to conduct a time-consuming search to replace employees. This action decreases employee morale, increases turnover and is costly because of the hiring and recruiting process.
“HR Lesson # 5: Time and energy needs to be devoted to workforce and management development because an entrepreneurial enterprise cannot afford to outgrow its talent resources.”
HR challenge #6 clearly defining job responsibilities It is really important to let every employee have a clear idea of what they are supposed to do. If they know each of their duties and responsibility, they won’t overlap their jobs. Organizations also need to continuously review employee job descriptions/ responsibility to make adjustment from time to time. This way if can decrease frustration and confusion.
HR challenge #7 Demonstrating commitment to your workforce
It is really important to demonstrate commitment to your workforce especially when your business is still new because employee might feel unsecure about their jobs. They might worry their jobs is not for a long term run. Ways to decrease this problem is to maintain employee’s compensation and benefit even when time is difficult. Also always spend more time and try to communicate with the employees will help prevent this problems.
HR challenge #8 Fairness in Salary and Rewards
Compensation and benefits plays an important role in this. Entrepreneur often rewards employees with incentive on case by case basis for their willingness to take the appropriate risks and perform their duties at a high level. Differences in wages and rewards between other workers can cause the feeling of inequity and unfairness.
HR challenge #9 attractive wages and benefits
It is really important to have attractive wages and benefits, so that employee can work harder for it. It can keep top talented workers and it can make others work more effective. Some of the compensation strategies are using lower base salaries coupled with profit sharing, hearty performance bonuses, and ownership opportunities. Other ways to attract employee are investing time and care in developing a pleasant corporate culture, opportunities for advance or job rotation. To make employee keep their attitude, the business must be competitive in terms of wages and benefits.
HR challenge #10 appropriate effective HR administrative structure
The human resource policies are those that aid in achieving the mission of venture while not being overwhelmed with substandard performance, rigidity or high costs. These policies are trying to keep the employees to actively participating and to obtain the cooperation. It has increased employee’s trust, loyalty and performance, meanwhile, reducing the need for more narrowly defined and rigid human resources policies. Employees are the key drivers in instituting, adapting, communicating and enforcing entrepreneurial human resources practices. Always need to be flexible, speed, engaging and has to be cost containment.
In this summary, it was discussed that the importance of hiring quality people, generating high level performances sooner, retained work forces and HR functions. HR function has very important value towards businesses. If not showing much concern towards HR functions, it can destroy the ability to hire excellent people, generate strong performances quickly, maintain flexibility and control the overall cost of HR functions.
-Alice Cheung, Anna Zhu, Eva Li
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