HR for SME’s – do we really need it?

Many SMEs do not have an HR function, which is understandable in organisations with few employees. A full-time HR person would be costly and probably not fully utilised if the headcount does not warrant it.

As Human Resources are ultimately a management responsibility, management should bear the full brunt of this in an SME. However, many managers are not well versed in the full HR functions, and HR mistakes due to a lack of understanding of the current HR environment can be costly and time-consuming.

The following HR functions are critical to any business, regardless of size:

Recruitment

SME’s do not have the luxury of making a bad recruitment decision.  Whilst a “mismatch” in a larger organisation can be remedied through training or possible re-deployment, an SME needs a new employee to hit the ground running at full speed.

The recruitment process is imperative in terms of ensuring you have the right person for the job, the first time round!

Probation

Even with an established, sound recruitment process ‘bad apples’ can still slip through the cracks. Therefore, a strong probationary management process is also critical. Not only will it address issues before they become a major problem, but it will also help you to understand and ensure that new employees who are performing well will derive continued job satisfaction.

Performance Management

A poorly performing employee needs to be dealt with fairly and consistently, regardless of the size of the organisation. SME’s should be extra vigilant in this regard, as they are often the target of employees who are looking to take companies to the CCMA in the hope of a pay-out based on pure management ignorance.

Again, a poor performance management process that is well laid out, documented, understood and enforced will prevent any misunderstandings and possible negative findings at the CCMA.

Remuneration

When it comes to SARS, ignorance is never bliss. The South African legislative framework is very clear in terms of how salaries should be handled, and any deviations from this can be costly!

Labour Relations

Many of the Labour Relations issues that land up at the CCMA are preventable if a sound Labour Relations framework is in place. The law does not differentiate between different size organisations, and therefore it is imperative that SME’s fully understand the implications of all aspects of Labour legislation.

How do SME’s address all the above?

There are a number of options in this regard:

1. Call in an expert! Use the services of a suitably experienced and qualified HR consultant, who can help to set up the principles and processes of the above, and then work on an ad-hoc basis only as and when needed reducing the cost of a full-time HR salary.

2. Ensure that all managers are fully versed in the HR spectrum of their HR responsibilities. On a cautionary note, it is important to understand when HR matters start to take over more time than the actual operation of the business –this may be a sign of poor HR processes and procedures, and time to call in an HR expert!

3. Outsource your HR requirements so that all HR matters are dealt with by HR professionals – there are various options available, to meet both your business and financial requirements.

 Article written by Andrew Morton, Consultant

Examining the elements of Section 6(4) – 3 of the Employment Equity Act

“performing work of equal value”

Logically this would seem to indicate more than one employee employed in any position performing functions of “equal value”.

This could also mean anything, and for the same reasons provided in the previous item, the challenge will be to identify and agree on the factors that determine “equal value”.

What is the risk and why is there urgency?

 

Many, (? most), employees believe that they are underpaid and that the services they render add more value than those provided by others.

Current difficult economic times and high debt levels also put pressure on employees to seek opportunities to increase their earnings.

The changes to the Act provide such an opportunity, and invites both trade unions and non-unionised employees to place the employer’s employment policies and practices under severe scrutiny.

We believe that employees and their unions are going to grasp the opportunity with both hands, and it can also be expected that they will exercise their rights pertaining to information disclosure and transparency.

Employers can therefore expect a flood of alleged discrimination allegations and possibly even labour action, which if not resolved to the employee’s satisfaction, will be referred to a Bargaining Council or the CCMA for resolution.

 

Contact us to discuss the solutions to mitigate risks associated with the changes made to the EE Act!

#FindingShapesHR

 

Purpose of HR Policies & Procedures

Companies get direction from HR policies and procedures.
Finding Shapes HR will assist you in developing these important aspect for your company - big or small!
www.findingshapes.co.za

It's standard protocol for HR to construct the policies and procedures for an organization because HR is the area that's solely responsible for maintaining employment matters according to the company's philosophy and in compliance with regulations that apply to labour and employment.

Structure

HR policies and procedures provide workplace structure. Without certain policies, such as working hours, disciplinary action, performance reviews and rules concerning worker safety, the work environment could be chaotic.

Fairness

HR policies and procedures support equal employment opportunity in giving fair treatment to applicants and employees throughout the hiring process and the employment experience.

Best Practices

Many organizations conduct routine analyses of their business operations. HR policies and procedures can aid in the analysis of HR practices and overall business practices. Of all the HR policies and procedures reviewed, those that have the most positive effects on the organization generally are called "best practices."

Strategy

HR policies and procedures are the functional elements of an organization's strategic plan, meaning the policies are the steps necessary to achieve strategic goals. However, HR policies and procedures serve the important role of redefining HR strategic development and the direction of the organization.

Consistency

Achieving consistent operations is one of the reasons that HR policies and procedures are strongly recommended. HR staff has an obligation to handle employment matters consistently, and policies and procedures enable that consistency.

Acknowledgement:  Ruth Mayhew

Wondering whether the Employment Equity Act applies to you?

Wondering whether the Employment Equity Act applies to you?

 

 

Confused about how to implement employment equity in your company?

Do you:

	Employ more than 50 people; or
	Meet the annual turnover in your industry listed below?

Industry	Total annual turnover
Agriculture	R6m
Mining and Quarrying	R22.5m
Manufacturing	R30m
Electricity, Gas and Water	R30m
Construction	R15m
Retail and Motor Trade and Repair Services	R45m
Wholesale Trade, Commercial Agents and Allied Services	R75m
Catering, Accommodation and other Trade	R15m
Transport, Storage and Communications	R30m
Finance and Business Services	R30m
Community, Social and Personal Services	R15m

If you answered yes to any one or both of these questions, you’re a designated employer. This means you have to comply with the Employment Equity Act.

Let us assist you!

www.findingshapes.co.za

One of my employees has absconded - how do I terminate his services?

 Employers will at some stage have to deal with an employee that failed to return to work.

But how does one know that the employee absconded and is not just absent as a result of illness or other circumstances beyond the control of the employee?

The employer will not know but you cannot assume that the employee has absconded; the onus rests on the employer to establish that the employee will not return to work before a dismissal can be considered.

If an employee is absent for a period of more than 3 days, you will deal with this as absconding in terms of your disciplinary code.

Contact Finding Shapes HR for professional assistance with this and all other disciplinary matters.

www.findingshapes.co.za

 

 

Pros and Cons of HR Outsourcing

Introduction

Picking through the white noise about outsourcing can be time consuming and tedious. And while you’re busy doing all that research, your company’s payroll and benefits problems aren’t going anywhere. You need to outsource—but you’re not clear on the alternatives available to you.

Who Should Read This?

You will want to read this document if you are evaluating HR outsourcing alternatives for a company between 1-100 employees.

Companies Face Several Alternatives

Outsourcing isn’t the only answer. Most small companies face a complicated decision path when deciding what to do with business non-core functions.

This is because small companies, even more so than their larger counterparts, need to focus on their core competency with laser-like precision. Any function that doesn’t directly relate to that core competency distracts the workforce from developing the company’s product or service.

When faced with human resource challenges, companies have three alternatives:

Create or Improve the In-House Infrastructure

Pros: Creating an in-house infrastructure gives business owners the confidence that they are building the HR processes that are right for their company, and psychologically it offers a sense of control. It allows a business owner to create a company culture from the "ground up" by hiring employees who oversee the general environment, character, and personality of the company.

Cons: A smaller company may not have the time and resources to build such an infrastructure. That time may better be spent on developing the company’s product or service. It’s also possible that the right HR provider—which forms a true "match"—may indeed be able to contribute to the company’s internal culture by streamlining processes and offering high-level HR expertise.

Multiple Vendors

Pros: If the decision is made to outsource the HR function, companies may choose to seek out providers that handle disparate functions. For example, they may select a benefits broker and a separate payroll provider. The advantage to this approach is cost driven; a company can generally spend less on providers that specialize in handling one particular function. That’s because single-function providers tend to do large volumes of business in order to keep their price point low.

Cons: The time and effort of managing multiple vendors can often offset the up-front cost savings. This is particularly true if the vendors deal with related functions—such as payroll and benefits—but use separate systems or databases to do so. These means that the functions aren’t integrated and can often prove extremely difficult to manage properly. In addition, "large volume" providers may not offer the individual attention or the range of services that the company truly needs, undermining the attractiveness of the lower cost.

Single Vendor

Pros: The HR outsourcing landscape offers the ability to outsource to a single provider. These "integrated" providers offer payroll and benefits together on a single platform, as well as high-level HR expertise in the form of on-site staff. Single-vendor providers can act as a company’s entire HR department and prevent the need for in-house staff or infrastructure.

Cons: The primary disadvantage of an integrated outsourcing provider is that the service may be overkill for a company that only needs to offload a single HR function. For example, if payroll is the primary problem, the company probably only needs a payroll provider rather than an end-to-end service. In addition, an integrated provider may offer a degree of flexibility in its service but may not be able to accommodate specifics requests from its customers (for example, building electronic timesheets into its online services).

Recommendations for Due Diligence

Points to consider when evaluating HR providers:

Does the cost of the provider’s services lead to other time and cost savings, such as reduced administrative staff, decreased employee oversight, etc.?

Does the provider have customers willing to provide references?

Is the provider’s fee structure easy to understand, enabling a cost analysis of outsourcing fees versus in-house investment?

Does the provider leverage Internet delivery for time and cost savings?

Does the provider offer a call centre for employee questions?

What is the provider’s set-up process? How fast can it be completed?

Disclaimer

The contents of this white paper have been prepared for educational and information purposes only. The content does not provide legal advice or legal opinions on any specific matters.

You should not act or refrain from acting on any legal matter based on the content without seeking professional counsel.

Acknowledgement: www.trinet.com

 

Employment Contracts

In terms of the Basic Conditions of Employment Act, Number 75 of 1997, as amended (the “Act”) it is compulsory for employers to provide their employees with a written contract of employment or letter of appointment, covering the terms and conditions of their employment relationship.

Contact us should you need assistance!

www.findingshapes.co.za