Top 7 HR best practices for SMBs in India

By Girish Rowjee Small & Medium Businesses (SMBs) are inherently different from large enterprises. They are fast-paced, execution-centric and growth-driven. Time-bound execution is often so critical for survival that policies & strategy often take a back seat. People wear multiple hats and juggle multiple balls. Budgets may be constrained, leading to high contention. Unlike larger organizations, people can’t hide under layers of org-charts. At the same time, people can be the biggest differentiator for SMBs when it comes to their success, underscoring the need to implement HR best practices to set them apart. The following are some of the HR best practices SMBs can follow to blaze the trail: Recruit the best People are the biggest asset of an organization and more so for an SMB. SMBs typically don’t hire en masse, they rather cherry-pick talent. Unlike large enterprises, they don’t have great brand power to pull in top talent. However, they can offset lack of brand pull with greater engagement. Using digital channels and social engagement, promoting a quirky brand image and an employee-centric work culture can help them hire and retain the best. They can explore the blogosphere, conduct open houses or hackathons, attend industry events and do social recruiting to spark interest from the present-day digital natives. Pay competitively Many times, large enterprises don’t pay top moolah because they believe the social reputation their brand carries is also a form of compensation. This might dictate that SMBs have to shell out more to attract top talent. However, that may not necessarily always be the case. SMBs can also offset monetary compensation with a better work culture, well-bonded teams, reduced workplace conflict, transparency in decision-making and better communication from management. However, it pays well to be informed of the market structure and have a well-defined compensation policy in tune with that. Irrespective of all confidentiality agreements, people discuss their salaries, so ensuring skill/ experience-based parity is a great idea. Shore up employee engagement Engagement is when employees feel a greater bond and affinity, both mental & emotional, with their co-workers. Engaged employees are empowered employees. It is imperative that the leadership team articulate the vision and mission of the organization, bring greater transparency in decision-making and involve employees in decisions that affect them. Creating organization values and adhering to them also fosters engagement. If employees understand why they are doing what they are doing, they feel a greater commitment to their personal and company’s success. Management should over-communicate and ensure employees have a voice that is heard. Management should use town-halls, off-sites and employee-mixers to heighten engagement. Pursue rewards & recognition Spontaneous rewards, such as gift-cards, spontaneous recognition and company-paid getaways are a great way to recognize employees “in the moment” as well as for sustained, exemplary performance. Non-monetary rewards also build social recognition – remember status is more than money. While rewarding employees for the right reasons is a great idea, they can also mould behaviours and habits favourably in the long run. Rewarding employees builds motivation and aligns people to the strategic objectives of the company. Practise rapid & continuous feedback SMBs typically don’t have deeply-entrenched performance appraisal systems in place. Larger organizations tend to have well-defined employee evaluation cycles, such as quarterly evaluation and a final year-end appraisal. Whereas in larger organizations, employees can ‘hide’ under layers of fat but an individual employees’ performance is highly visible in SMBs. Instead of cycles, SMBs should practice rapid and continuous feedback for evaluation. Such agility ensures employees can amend, take corrective action and pivot fast to ensure dynamism in performance. Institute & document clear HR policies & procedures Employees like to be treated fairly and consistency is really the key here. Well-documented policies, such as about flexi-hours, leave policies, maternity benefits, etc. ensure that people perceive even-handedness in the system. It is good to empower employees before holding them accountable. Employees also like to grow in various ways, so well-documented policies that encourage skill-building through training and development as well as avenues for career progression are critical. Ensure statutory compliance While not directly linked to employees, ensuring statutory compliance is vital for SMBs’ survival. SMBs can’t cite their size or lack of resources as an excuse for non-compliance. Having a dependable HR and payroll software provider can ensure Provident Fund, Professional Tax, Employee State Insurance and Labour Welfare Fund laws are complied with. Such a platform can also help implement HR policies and enable better tax planning for individuals. The author is co-founder and CEO of Greytip Software.