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How to build an HR plan that supports your company’s growth

Set your business and your employees up for success with a strategic plan that will help prepare you for growth

10-minute read

Whether you run a small business or are at the helm of a huge operation, your biggest expense—and arguably best investment—is your labour force.

It’s imperative to manage this resource in a strategic way, both to get the best ROI and to foster a fair and pleasant workplace primed for growth, says Adam Nalepa, Senior Business Advisor, BDC Advisory Services.

Entrepreneurs sometimes forget that the biggest strength of their business is their people. It’s important to set your employees up for success with a well-rounded HR plan.

What is an HR plan?

At its core, an HR plan is a strategy that encompasses everything related to the people in an organization, from recruitment and compensation to performance and training. Similar to the way a business plan details a company’s objectives and how it plans to achieve its goals, an HR plan outlines everything an organization is doing to manage the people side of their business.

Do you need an HR practitioner to have an HR plan?

Most small and medium-sized businesses do not have an HR practitioner or HR department to help hire and manage their employees.

“For businesses with 25 or fewer employees, we typically see either the owner, the person in charge of accounting (controller or CFO) or the office manager taking responsibility for HR,” says Nalepa.

While it’s helpful to have someone with HR expertise applying their knowledge to your business, it’s possible for one person or several people to take responsibility for various aspects of HR.

“It’s really a matter of identifying who does what. Who will manage recruitment, onboarding, creating workplace policies, performance management? It all needs to be documented and communicated, but managers can take control of different aspects. And all of it should be in partnership with employees, or at least communicated broadly to everyone,” says Nalepa.

Why is an HR plan important?

Running a business without an HR plan is like investing in an expensive piece of equipment and failing to put standard operating procedures in place. In addition to being clear on recruitment and compensation, it’s critical to establish a workplace where there is a common understanding of how things work, what is expected of each employee and how everyone’s role fits into the greater purpose of the organization.

An HR plan is an investment in a safe and healthy workplace. It’s also a way of cultivating relationships and creating opportunities for employees to grow and be supported.

Nalepa notes that an HR strategy with clear workplace policies that are in line with provincial and federal regulations also serves as risk management for employers.

“We’re seeing an increase in wrongful dismissal lawsuits. Many organizations don’t have policies and proper documentation of workplace standards and disciplinary actions. You won’t have a leg to stand on in court if you don’t have anything that documents what you expect of employees and what happens when they fall short of your expectations, including any disciplinary action.”

What should be included in an HR plan?

A comprehensive HR plan will include every aspect of hiring, managing, training and letting go of employees. Nalepa says there are four levels to an HR plan.

Level 1

Employee handbook or manual

This document outlines everything your employees need to know about working for your organization, including:

  • Workplace policies
  • Expectations of employees
  • Hours of work
  • Vacation, sick days and other leave policies
  • Compensation and benefits
  • Performance management procedures (i.e., quarterly/annual review)
  • Dress code

We find that 80% of what managers deal with is people issues. You can remedy that with a handbook that sets clear ground rules for all employees.

“It sets employees up for success, demonstrates that you’re treating employees fairly and equitably and frees up leaders’ time to work on matters that move the business forward.”

Information to include in the handbook may vary by workplace and industry. Some businesses may include their mission statement and values and other corporate culture resources. You may also choose to document health and safety policies and procedures within the handbook or create a separate document.

Job descriptions

Nalepa says every individual within an organization needs a job description. “It sets expectations and creates accountability so both employees and employers know what duties and responsibilities each role brings to the business.”

“A person working without a job description creates vagueness and misalignment of expectations. It can be a clarifying exercise to create job descriptions for everyone in the organization—you’ll quickly see where there are gaps, overwork or room for growth,” he says.

For smaller businesses that are just beginning to hire, this is a good starting point to their HR plan because you can’t recruit without job descriptions. If you have a small number of employees who have evolved into their current roles, make sure to define their roles and responsibilities.

Organizational chart

An org chart is a visual representation of the internal structure of an organization. It demonstrates hierarchy and, more importantly, the communication flow.

“Within a lot of small businesses that have legacy employees who’ve been around a long time, we notice that they usually take the path of least resistance to get something approved. That sets a bad example for newer employees,” says Nalepa.

An org chart helps establish a line of communication and authority to help ensure that the right people are making the right decisions.

It’s also a handy onboarding tool for new employees because it provides a big picture view of how the business works—from individual roles to teams and departments.

Level 2

Talent management and recruitment strategy

Once you’ve established a clear foundation of workplace policies and responsibilities, you can build on it with a clear integration and onboarding plan.

“You want new hires to feel like they’re part of the organization from day one. Your onboarding plan should be clear, concise and help new people ramp up in their jobs quickly,” says Nalepa.

An onboarding plan should include:

  • Employee handbook
  • Job description
  • Org chart
  • All the equipment they need to do their job (e.g., laptop, logins, tools, etc.)
  • Introductions to their manager, teammates and other departments so they have a good understanding of the ecosystems within the organization
  • Training materials or plan

Level 3

Performance management

Most modern workplaces with strong retention and a cohesive workforce have performance management strategies, says Nalepa.

“It’s important to make sure employees are performing to expectations. You can help by providing feedback and constructive guidance.

Younger generations in particular want to have more touchpoints with their leaders and transparency about what they’re doing well and what they could improve.”

Performance management as a process can be as simple as taking each employee’s job description and defining what success looks like, including specific goals. You can use our free employee goal setting tool to get started. Achievement of these goals can be evaluated with their manager on a regular basis, such as quarterly, bi-annually or annually. Some organizations tie compensation bumps to performance; others use it as a metric for growth.

“Consider your organizational strategy and business goals and, by position, identify what each role does to help big picture goals. It not only helps the business but creates a sense of teamwork,” says Nalepa.

Performance management is also a good opportunity to receive feedback from employees and integrate their ideas into business practices.

Level 4

Career development

Nalepa says the number one employee retention tactic is career development. “Most people want to grow, learn new skills, become more well-rounded and advance their careers. It’s up to employers to create those opportunities.”

Building on performance management benchmarks, leaders in your organization can look to develop some employees to roles that allow for more growth and meaning. For others, they may look at adjusting roles to create a better fit.

A strong HR plan will consider the future of each individual in the workplace and how they can be at their best.

What are the steps to create an HR Plan?

Preparing an HR plan can seem daunting for many small businesses so it’s important to start small and build an HR plan in stages.

Nalepa advises taking an inventory on what you have and what you may need from the four levels of an HR plan.

“It’s okay to slowly build your HR plan. You don’t want to overwhelm your employees with a bunch of new policies and requirements. Work through each of the levels and educate employees as you go about why you’re building an HR plan and how it will benefit them as employees.”

How do you outline your HR needs?

Another way to take stock of what you need when it comes to HR is to conduct an employee survey to take the pulse of what your workforce would like.

“It’s helpful to get a baseline of what your employees feel you’re doing well and what they would appreciate. However, if you’re asking for feedback, you have to be willing to act on it. If you don’t, that could create a toxic environment,” says Nalepa.

This is where third-party practitioners such as BDC can come in to get an unbiased snapshot of the employee experience.

“It’s really a matter of communicating in the right way when you ask those questions. For example, ‘We want to create an environment that supports you better and we want to hear your thoughts.’ If the intent comes from a good place, it can start opening doors for owners with their employees.”

Example of an employee survey

Typically, employee surveys are questions that can be answered on a 1 (strongly disagree) to 5 (strongly agree) scale and may include:

  • Do I understand the organization’s vision and values?
  • Do I share the same values as leadership?
  • Do I feel welcomed and appreciated in my organization?
  • Do I have too much work on my plate?
  • Do I feel comfortable sharing my thoughts with leadership?
  • Do I feel respected in my organization?
  • Do I understand how my work affects the organization’s business goals?
  • Do I have a safe working environment?
  • Does our company adhere to a zero-tolerance policy against harassment and discrimination?
  • Do I have the tools and equipment to perform my job effectively?

If you conduct an employee survey, it’s important to communicate the findings and share how you plan to address them.

How can you ensure your HR plan grows with your business?

Like many aspects of running a business, an HR plan is not a ‘one and done’ proposition. Your plan should be a living document that is constantly adjusted as your business and your workforce evolves.

“It’s helpful to do an annual review of your HR plan, including performance and business goals. Take a scan of each department to see how the plan can be adjusted according to new needs. You want to ensure you’re supporting your employees the best way you can,” said Nalepa.

Overall, an HR plan shouldn’t be seen as a burden or a hassle within an organization. It’s a strategic part of enabling a business to thrive and grow.

“Owners are certainly looking at HR in a more strategic and positive manner. It’s not the days of old with HR wagging its finger at someone and saying, ‘You didn’t follow the policy’. It’s more of a support mechanism for businesses and a really important element for recruitment and retention.”

Next step

Find out how BDC can help you build your HR plan to improve your recruitment and retention practices to attract the qualified talent you need to run a successful business.

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