Why You Have Reactive HR, and Why That’s Bad for Business

It is the naïve entrepreneur who believes that HR is the most disposable department within an organization. HR is not merely an extraneous administrative function; it is as integral to business success as sales, marketing and even management. HR handles some of the most critical tasks within a company, such as payroll, conflict resolution, recruitment and training, and without professionals handling these tasks, the business would surely fold.

Fortunately, if you once took the green stance that HR is superfluous, there is still time for you to change. Here are some good signs that your current HR solutions are untenable and some ways you can adopt a new HR strategy to build your business big.

What Reactive HR Looks Like

If you are an entrepreneur guilty of undervaluing HR, you likely using a reactionary approach to HR. Perhaps you maintain total control of HR-related decisions; perhaps you delegate it to other employees, none of whom have HR training or the time and energy to focus fully on HR needs. Thus, changes to HR occur only when problems arise — and even then, problems are not researched and resolved in ways that will prevent future issues from cropping up.

Reactive HR isn’t so much an HR strategy as it is a lack thereof. Businesses that lack a well-thought-out, scalable HR roadmap are forced to solve HR-related problems after they develop — which means they have already had a negative impact on the business.

How Reactive HR Develops

Another sign that you have reactive HR at your business is the process through which your HR policies developed through the years. Here’s what could be a recognizable path:

Phase 1: The business founder and/or CEO handles HR but limits its scope to just the essentials: payroll, benefits, recruitment and training.

Phase 2: The CEO becomes too bogged down with other responsibilities and so tosses HR management to a junior employee, who may or may not have experience in HR. Usually, this other employee has other, non-HR-related responsibilities to juggle as well.

Phase 3: The company grows, and the demands on the junior employee grow summarily. Problems arise with existing HR policies, and the junior employee is expected to develop high-stakes strategies for complex HR concerns, like engagement. Often, there is costly trial-and-error in searching for the right solutions.

Why Reactive HR Can’t Stay

Reactionary HR works — but it is supremely wasteful. First, you will waste your own time and others’ as you grapple with complex HR issues outside your wheelhouse. You might have training in business leadership, but HR is its own immense beast that requires knowledge and experience to maintain, especially at a growing company.

Secondly, you might lose dozens of talented employees because your HR policies aren’t appropriate. Read any listicle about what employees care about most, and you will discover that most of them are controlled by HR: work environment and culture, technology access, career development opportunities, benefits and perks, etc. When you are leaving HR on the backburner, it’s unlikely top talent will find these sought-after attributes at your business, and they will look elsewhere for work.

Finally, you will blow your budget on HR tactics and solutions that simply don’t work for your business. Even freemium HR software has a cost: the wages you are paying your employees to monitor it. Before you throw money at an HR solution, you should be certain that it will work.

What to Replace Reactive HR

The only way to establish certainty with regards to HR is to hard-bake HR strategy into your business plan from the get-go. From Day One, you should have a scalable HR system, one that doesn’t rely on you or other under-informed employees to juggle HR responsibilities with their regular jobs. You can start with free or affordable automated HR software, but you should have a plan for when and how to alter HR as your business grows. For example, you should know about the best PEO companies catering to your industry and the different types of HR professionals you might hire for in-house help.

To reduce risk, eliminate waste and otherwise keep your business humming, you need proactive HR. However, you will never develop an efficient, effective HR system if you don’t first recognize the value in HR. Work on that, and then work with HR professionals in your area to give your business the HR it needs.