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Key Areas of HR Your SME Must Understand

It’s easy to let HR lag behind when your focus is on day-to-day business operations. But it’s a big mistake to prioritise external marketing while ignoring the experience of arguably your number one asset – your employees. It’s no longer enough to process payroll and schedule annual leave. In today’s upwardly mobile job market, employee experience matters. Things like flexible work practices, reward and recognition schemes and even wellbeing plans are becoming the norm.


Obviously, it’s not feasible to change your whole HR function overnight. And of course budget will be an issue. That’s why we’ve compiled a list of the key HR strategies for SMEs to focus on. Work through this list and you’ll be heading in the right direction.

1) Organise

The best way to get started is to write up an employee handbook. This acts like a blueprint for how employees interact with the business. It also allows your staff to be fully informed about what to do and what not to do at work. The handbook should be in line with your company vision and values, clear and easy to read.

Some of the most important points to incorporate into the employee handbook are:

  • The vision, values, and mission of the company
  • A code of conduct for all employees (including management)
  • The policies related to the use of communications and technology and within the workplace
  • Employee benefits including leave entitlements, worker’s compensation, and any bonuses or incentive schemes
  • Performance evaluations, pay raises and disciplinary procedures
  • Termination of employment policies

When preparing content for the handbook, clearly define everything to avoid problems and misunderstandings later.

2) Improve employee satisfaction

If you want high productivity, loyalty, and commitment from your employees, then you need to make sure they are satisfied with the company and their role. Satisfaction leads to higher engagement and improved morale. You can improve employee satisfaction through a range of monetary and non-monetary benefits. If you’ve got the budget then, by all means, increase wages or offer bonuses or rewards for high performance. Other strategies include a focus on lifestyle (like flexible working hours), work from home days, regular communication and feedback sessions, and using games, contests, and incentives to make work tasks more fun.

3) Offer training and development programs

This should start with the new employee orientation program, but it shouldn’t end there. You’re competing with larger organisations that have the budget for impressive training and development offerings. What kind of training would increase your employee’s skills for their current job, while improving their prospects for the future? Training lets them know you’re investing in their goals and value their professional development. Provide them with opportunities that will allow them to take on greater responsibility within your business – think about on-the-job, classroom and online training. Consider paid time off to attend development courses or offer reimbursement or other assistance for employees who pursue higher education.

4) Have a clear company culture, mission, and values

Employees these days expect clarity from a business in terms of its goals and vision. They want to feel like they’re a part of something bigger, something meaningful. Clarifying strong values that drive business decisions and interactions with employees is crucial. These values can also include your legal obligations. You need a bullying and harassment policy, and to prioritise WHS. All employees should receive an induction into these legal issues to feel valued and safe in their workplace. While you’re at it, get them inspired by the vision of the business. If your business has a vision and values that employees can get on board with, they’re going to be aligned with your business goals. If they’re aligned, they’re going to be more engaged. If you improve employee engagement, you’re going to have staff who are happier and more dedicated. In turn, that will lead to increased staff performance and higher profits. Plus, you’ll have lower employee turnover, which will save you time and money on recruitment. It’s a no-brainer.

5) Motivate and retain

Sometimes finding superstar workers is not an issue, but making them stay and work with you for a long time is a daunting task that baffles many SME owners. Small things can make a big difference to employee motivation. Here is what you need to do to attract and retain talent in your business effectively:

  • Ask your employees what they want. Simple but effective – what kinds of things make a great workplace in their eyes?
  • Recognise your employee’s efforts – in both public and private
  • Ask your employees for feedback regularly
  • Consider things to break up the week like pet-friendly days, shorter hours on Fridays, etc.
  • Make the work environment aesthetically appealing, comfortable and fun
  • Seek input from employees on business and industry challenges and acknowledge their suggestions (you might even get some great ideas)

6) Implement legal employment practices

It is critical to ensure that your hiring, employment, and dismissal practices are in line with state and federal employment rules and regulations. All SME owners must understand these employment laws in order to reduce the chances of violating them and dealing with the consequences. A great way to implement legal employment practices is to hire a legal specialist or a seasoned HR professional to write an employee handbook. A Human Resources consultant like this, that you contact whenever you need, could be a lifesaver. Plenty of information is also available online. Here are the links you’ll need:

Workplace relations in Australia
Fair Work Ombudsman Fact Sheets – Policies and Guides
Equal Opportunity and Diversity –

Read through carefully and ensure your current practices are above board, before implementing some of the new ideas above.