We all get along. We all listen to Dad or Mom. We don’t need HR at our family business. Wrong! HR is a necessity and Keri Ohlrich, PhD of Abbracci Group offers us advice on the first step of understanding what you actually need in terms of HR.
If you’re like many family business owners, you might say, “I have low expectations of HR” or “Do I need an HR function?” or “Yes, my sister does that for me in her spare time, but no, she isn’t an HR professional.” Of course, I am hoping you say, “I love my HR department and I treat it like the profession it is.” You might be somewhere in the middle and not quite sure what to do about HR. No matter where you are, let’s get real and talk about why you need HR and what you should expect.
The Need for HR
Let’s answer the first question, “Why do I even need HR?” I ask, do you need engaged employees? A quick review of engagement numbers from Gallup:
- 200: 26% engaged
- 2012: 30% engaged
- 2019: 35% engaged
Interestingly, employee engagement is rising during the pandemic (1). However, even with a potential high of 40% engagement, what if you had 50% engaged employees?
Engagement does have a significant effect on the bottom line: “Highly engaged business units result in 21% greater profitability” (2) and “Managers account for at least 70% of the variance in employee engagement scores” (3).
Your leaders and employees can give you 21% greater profitability, so yeah, HR is important and needed. They can help you get more with what you already have…your employees. And family members and non-family members in your business need to be engaged and impact the bottom line.
Look in the mirror
Before you say, “I need an HR Warrior” or “My HR Manager or department isn’t getting it done”, look at what standard you are setting for the function. Are you a Promoter (all in for HR), Potential (are you on the fence about HR), or are you a Problem (have no use for HR)? (4)
Here are a few questions from my book, The Way of the HR Warrior, to understand the organization’s view on HR. How would you answer? (5)
- Your organization fully funds the plans and strategies of the HR Department.
- Your organization takes an active and involved role in hiring the best talent for HR.
- Your organization has outsourced nonstrategic, administrative work of HR, so that the internal HR team can focus on strategic work.
- Your organization’s leaders rely on HR for advice and coaching.
If you answered Yes to all, you are an HR promoter and want a strong HR department.
If you answered No to some of these questions, you might be a Potential or a Problem in terms of HR, and therefore, need to look in the mirror and ask, “What do I expect of HR?” Do you want to have a strong HR department, are you prepared to fund it, are you motivated to hire the best HR talent, and do you truly want a strategic partner? Are you prepared to hear coaching and talent assessments about family members?
You need engaged employees regardless of family status! You want a profitable and sustainable family business. In order to do that, you need to look in the mirror and ask yourself, what view do I have on HR and am I willing to put in the work? Answer that and in our next blog we will cover actions you can take to create your HR function (even if it is vacant or filled by your sister!)
4-5) Ohlrich, PhD, Keri & Frede, Monica. The Way of the HR Warrior. 2008. Lifetree Media.