Throughout my HR career, I’ve had the pleasure of working with many incredible entrepreneurs to help them build a successful talent management strategy from scratch which means that I’ve seen a lot of business plans. Every business plan includes the essentials such as the company mission and vision statements, marketing plan, sales plan, financial goals, etc. However, I’ve yet to see a business plan that outlines the company’s plan for their human resources.
I know you’re thinking that if a business is just starting out, it’s too early in the process to begin thinking about how they’re going to manage their talent since they may not have any employees yet. It’s a common misconception that businesses only need to think about HR if there is an urgent need such as a payroll miscalculation or a workplace investigation. Often when developing their business plan, entrepreneurs don’t see the need to include HR since it’s not “essential” just yet.
But I would argue that HR is just as essential to your business plan as product development. HR’s role is to drive business success with employee success. Without talent the business doesn’t exist. While you may not have employees yet, adding an HR strategy to your business plan not only ensures you have the right people, with the right skills, in the right roles, at the right compensation, at the right time, but it shows that you’re a leader who is intentional about investing in their talent, which also gives you a competitive advantage in recruiting and retention. After all, HR is a business function with a goal to add value with the ROI you receive from your human assets.
How and when you’re going to invest in the talent that brings your business to life should be an intentional part of your business planning strategy.
Here are a few elements to consider when adding HR to your business plan.
1. Have a Mission and Vision Statement for Talent Management
A key element to any business plan is the mission and vision of the company. In other words, what do you do? who do you it for? Why do you do it? And what are you looking to accomplish in the long run? The same questions need to be asked when developing an HR business plan.
Entrepreneurs should ask themselves in the early stages of business planning, what kind of employer do they want to be, why do they want to be this kind of employer, what are their goals for future talent as it relates to business success and what resources are needed to help us be the type of employer we want to be.
Your mission and vision statement for your HR strategy should be consistent with the mission and vision of your business. For instance, if your mission and vision is to become the world’s most innovative manufacturing brand, then your HR strategy should revolve around developing the full employee life cycle for an innovative workforce.
2. Think Through the Employee Life Cycle
The employee life cycle is a concept used to describe how the employee engages within a company from even before they are hired to the time they leave. The employee life cycle consists of six stages.
- Outreach-Campus recruiting, job fairs, professional organizations, etc.
- Recruiting: Job descriptions, pre-screening, interviewing, employment assessments, etc.
- On-boarding-assimilating new employees into the organization’s culture and workflow.
- Performance Management and Recognition
- Employee Development and Training
- Offboarding-terminations, employee departures, etc.
Understanding how employees engage with companies during each stage of the employee life cycle will help you design an effective HR strategy that meets the needs of your company’s unique culture and operations as well as help create a positive employee experience early on.
3. Integrate Your HR Business Plan into Your Financial Plan
One of the biggest challenges for entrepreneurs is wondering how they’re going to pay for everything they need to achieve business success including talent. But budgeting for future talent, salary ranges, training, payroll, etc, during the business planning stages will help set you up for greater success because you’ve already pre-planned your talent needs.
Whether you’re raising money through venture capital, loans, investors or even bootstrapping, you don’t have to wait until there is an HR related fire that you’re not sure you can afford to begin budgeting for future talent. Integrating your future (or present) human resources in your financial plan and seeing them as assets and not just as a cost will reap more rewards for the success of your business than you ever thought possible.
4. Leverage Your Marketing Strategy to Develop Your Employer Brand
When people think of employer branding, it’s usually centered around larger companies who already have an established HR team. But you don’t need to have a large team already in place to establish your employer brand. As an entrepreneur and small business owner, your employer brand begins with you as you lead your company and your team to new heights. Just like every business plan has a marketing strategy for how their company’s products or services are better than the rest, your marketing strategy should also include a plan to market your business as an employer people want to work for.
What are your company’s strengths in terms of talent? Is it flexible work schedules? The ability to innovate and create new products? Whatever kind of employer you wish to be and whatever benefits or perks you wish to offer to future talent, add it to the marketing section of your business plan.
In conclusion, HR should not be a reactive decision for small businesses and entrepreneurs, but a strategic partnership, intentionally integrated into the company’s business plan and working together for the greater good the company and the talent who bring it all to life.