Human Resources is often seen as a support function within organizations, managing employment paperwork, and ensuring legal compliance. However, HR has a far more significant role to play in the growth and success of businesses, especially small and midsize enterprises.
In this article, we will explore the correlation between HR best practices and business growth, drawing insights from an SMB HR benchmark survey.
The Relevance of HR Best Practices
HR best practices encompass a range of strategies and techniques that focus on recruiting, retaining, and developing a high-performing workforce. These practices are designed to create a work environment that fosters employee engagement, enhances productivity, and aligns HR with an organization’s broader goals.
For small and midsize businesses (SMBs), the implementation of HR best practices is not merely a matter of choice; it’s a critical factor in ensuring long-term success. Let’s delve into the key findings of an SMB HR benchmark survey to understand the impact of these practices on business growth.
The SMB HR Benchmark Survey
In a recent survey of over 2,000 small businesses, focusing on HR best practices, an intriguing correlation emerged. The survey assessed whether SMBs that prioritize HR as a strategic function perform better than those that focus primarily on administrative aspects.
The key findings were as follows:
- Prioritizing HR Yields Growth: The survey revealed that 91% of fast-growing companies make HR a strategic priority. These companies were significantly more likely to experience growth compared to those that treated HR as a mere administrative function.
- The Administrative vs. Strategic Divide: The survey further highlighted that businesses experiencing growth tend to focus on strategic HR components like employee development and retention. In contrast, those facing stagnant growth tend to concentrate more on the administrative aspects, such as compliance and paperwork.
- The Revenue Impact: Perhaps the most significant revelation was the direct correlation between HR best practices and revenue. Fast-growth firms that prioritize HR best practices have a higher likelihood of achieving substantial revenue growth. This finding underscores the pivotal role HR plays in driving overall business success.
The Strategic Benefits of HR Best Practices
Implementing HR best practices is not just a formality or an added burden for SMBs; it’s an investment in the future of the organization. By making HR a strategic priority, businesses can reap several benefits:
- Attracting and Retaining Top Talent: Proactive HR strategies make businesses more attractive to high-caliber talent and help retain existing employees, reducing turnover costs.
- Performance Improvement: HR best practices allow for the establishment of Key Performance Indicators (KPIs) and performance measurement, leading to higher productivity and efficiency.
- Alignment with Business Goals: A well-structured HR strategy ensures that the workforce is aligned with the broader business objectives, driving revenue growth.
- Adaptation to Market Changes: Strategic HR practices enable organizations to adapt quickly to changes in the labor market, such as labor shortages or evolving regulations.
- Enhanced Employee Experience: By focusing on development and engagement, HR best practices create a more positive and productive work environment.
Conclusion
The results of the SMB HR benchmark survey conducted by Asure clearly indicate that HR best practices are not just theoretical concepts but tangible drivers of business growth. Small and midsize businesses that prioritize HR as a strategic function reap the benefits in the form of increased revenue, talent attraction, employee retention, and overall success.
Recognizing the value of HR best practices is the first step toward a brighter future for SMBs, where HR is not just a support function but a key contributor to long-term growth and prosperity.