No business is immune to “people” challenges—whether it’s hiring, retaining, developing, managing, or exiting employees. This is especially true for small to medium-sized businesses, where one problematic employee can drain a manager’s time and effort, while one high-performing employee can invigorate a business owner with newfound energy and excitement about the business’s direction. “People” challenges can impact the business’s goals, whether it’s related to growing profitability, enabling the business owner to work more on the business than in it, or transforming the business into a lifestyle one, allowing the owner to step back or down. There’s significant value in seeking advice and expertise from a human resources company when a business leader is anticipating or actively facing an issue. A human resources company can offer specialised knowledge and objective perspectives, helping to navigate complex employee issues efficiently and develop and implement strategic HR initiatives that align with the business’s goals.
Recruitment-Focused HR Companies
Recruitment-focused HR companies, often referred to as recruiters or recruitment agencies, are likely the first to come to mind for most SMB owners when they think of HR. These agencies are known for identifying and placing candidates within businesses, operating on behalf of either the hiring companies or the candidates seeking placement—or sometimes both. Some recruiters specialise in particular functions, such as sales or IT, while others focus on specific sectors, like loan writers in the mortgage industry, or target job levels, such as executive or C-suite positions. They typically operate on a commission basis, earning a fee when a candidate is placed and often offer a guarantee if the candidate leaves before the end of a probation or ‘grace’ period, typically six months.
Regarding their process, candidates are sourced through job ads, existing networks, or headhunting and are then presented to the hiring manager with a resume, screened over a phone call and interviewed by the hiring manager, with or without the recruiter’s involvement. If the hiring manager decides to proceed, the recruiter will extend the job offer to the candidate but the responsibility for the employment agreement and compliance with awards rests with the hiring business.
Pros
- Potential Existing Candidate Network: Recruitment-focused HR companies already have suitable candidates in their network who are actively seeking new opportunities, alongside utilising advertising to attract additional applicants.
- Industry Specialisation: Some agencies offer deep expertise in specific sectors or functions, which helps in identifying candidates with the precise skills and experience required.
- Performance-Based Payment: They operate on a commission-based model, which means businesses only pay when a candidate is successfully placed, making it a financially prudent option.
- Placement Guarantees: Many offer guarantees that they’ll find a replacement at no additional charge if the placed candidate leaves within a certain period, mitigating hiring risks
- Streamlined Hiring Process with Limited Touch Points: Recruiters typically streamline the recruitment process by focusing on fewer touch points. After obtaining the job brief from the hiring manager, they may consult their existing candidate pool and place advertisements. Subsequent steps usually involve a quick screening and presentation of candidates for the hiring manager’s final interview. This method prioritises speed and may suit businesses looking for rapid placements over in-depth candidate evaluation.
Considerations
- Potential Misalignment between the Business and the Candidate: Due to the commission-based model where recruitment agencies earn a percentage for each placement, there’s an incentive to fill roles quickly. This often leads to this type of human resources company overlooking candidates who are the appropriate fit for a company in terms of values, behaviours and attitude. Unlike comprehensive HR firms that might focus more on aligning a candidate’s profile with the company’s values, recruitment-focused firms may rely more heavily on resumes and speed to earn commission.
- Recruitment-Specific Focus: These firms only concentrate on talent acquisition, which means additional support for other HR needs isn’t provided. Other HR functions such as employee onboarding, training, performance management, and succession planning are often ignored. Business owners might need to seek additional HR services to cover these essential areas, potentially leading to increased complexity in managing multiple HR service providers.
- Cost Implications: It’s costly for small-medium business owners to work with recruitment-focused agencies than to conduct recruitment in-house. These firms charge for their expertise and extensive networks, and it’s also common for these firms to take a percentage fee based on the salary of the role they fill, meaning recruitment-centric agencies can be a large investment for small-medium business owners.
Training and Development HR Companies
The growth of a business directly relates to the development of its employees’ skills and knowledge, which are its bread and butter. Without investing in employee growth, the business won’t be able to effectively scale. Training and development firms focus on enhancing your workforce’s skills and knowledge through courses, pre-prepared learning and development modules, interactive workshops, and coaching sessions. Common examples of these firms include sales training companies, customer service training companies, and management training companies. Through these initiatives, this type of human resources company improves business productivity by managing customer customer expectations, and delivering projects on time, through their people’s ability to manage their priorities.
Pros
- Leveraging Established Training Programmes: These firms often have pre-built training modules that can be put in place for small-medium businesses straight away, which removes the need to develop content from scratch. This speeds up the learning and development process for employees and also saves time and effort for owners in creating their own programs.
- Delegation and Expertise: By outsourcing training to specialists, small to medium-sized businesses can benefit from expert knowledge across fields such as sales, people management and customer service, that can be tailored to specific roles or functions. This not only leads to more effective training that resonates with your employees but also allows business owners to step away and focus more of their valuable time on other areas of their business.
- Purpose-Built Training Solutions: Many training and development firms can customise their courses for specific business needs and employee roles. Through doing this, these firms provide training that’s highly relevant and directly linked to improving job performance in the context of the role.
Considerations
- Effectiveness of Training Courses: Traditional course-based learning may not always be the most effective approach for everyone. After all, not everyone learns in the same way, so alternative methods such as on-the-job training or interactive workshops might be better suited in some cases.
- Lack of Tailored Content: Pre-designed courses might not perfectly align with your specific business needs or industry requirements. This can lead to situations where the content needs to be adapted, which might compromise the training’s effectiveness and relevance.
- Relevance of Training: Not all training content provided may be relevant to your business’s specific needs. This can lead to time being wasted where employees spend time learning skills or knowledge that don’t directly benefit or relate to their roles, which is a key consideration for small-medium business owners, as every hour spent learning unnecessary skills is an hour not spent contributing to adding value to the business.
- Assessing How Employees Have Applied The Training: Without taking part in the course themselves, it’s challenging for business leaders to assess the quality of training and how well employees are integrating their new skills into their work. This can make it difficult to measure the ROI and the real impact of the training on business performance.
24/7 Employment Relations Support HR Companies
Companies like Employsure offer round-the-clock HR support, ensuring that businesses have access to employment relations and work health and safety advice whenever needed. This type of human resources company manages urgent issues that arise outside of the typical 9-to-5 workday through online platforms and phone-line support. While they have their benefits, businesses need to consider the scope and scale of their needs when opting for 24/7 support services.
Pros
- Constant Accessibility: Offers ongoing support to address HR issues at any time, including helpdesk services and access to documents such as employment contracts, forms and policies.
- Focused on Compliance and Safety: These companies keep businesses updated with the latest employment laws through their online platforms and phone service, and maintain safe working conditions through employment relations advice. Importantly, they help businesses avoid costly legal repercussions and improve their workplace safety through up-to-date employment relations advice
- Risk Management: By focusing on compliance and safety, these firms significantly reduce the likelihood of encountering legal disputes and Fair Work cases. Effective risk management through compliance and safety advice protects the company from potential fines, lawsuits, and reputation damage.
Considerations
- Generic Solutions: While these services lend their support, their solutions and advice can sometimes feel generic and not tailored to the specific needs of small and medium business owners, which differ case-by-case. This might result in a less-than-ideal fit for companies with unique or complex HR requirements.
- Compliance-Centric Services: These firms are primarily focused on compliance and safety, which whilst important, may not cover other vital HR functions such as talent management, employee engagement, and leadership development. Businesses may need to engage additional HR services to fill these gaps, leading to increased HR management complexity.
Integrated HR Companies like Inject HR
Human resource companies like Inject stand out by offering an integrated & tailored approach to human resources management for small-medium business owners through three core competencies including recruitment and selection, human resource management, and training and development. They work closely with small-medium business owners to understand their strategic goals such as increasing profitability and expanding, while also putting together an HR plan and programme based on what the business wants to achieve. For example, businesses with new entrants may receive a plan with training and development modules to systemise and get rid of the need for ad hoc training, or these firms may develop an employee-value-proposition (EVP) to attract candidates to the business while assessing them to make sure that the person is not just a cultural or motivational fit, but that they have the right behaviours that will help them succeed in the role.
Pros
- All-Encompassing HR Services: Inject HR combines the strengths of specialised recruitment firms, training firms, and compliance advisors under its one roof. This integrated approach takes care of all aspects of people management, which leads to a more streamlined and cohesive approach to workforce management.
- Strategic HR Alignment: The services offered by Inject are designed to align with both short-term, and long-term, business objectives so that your people are engaged and your business can better serve its customers. In the short term, firms like Inject develop employee onboarding processes to enhance early productivity, while in the long term, career development programs focused on communication and time management can be created to directly connect to where the small-medium business owner sees their operations expanding in the future, matching company growth with future skills.
Considerations
- Need for Active Collaboration: Collaborating requires ongoing dialogue and active collaboration, which should be considered by small-medium business owners when allocating their time and resources.
- Investment Consideration: While investment in Inject’s services might reflect in the pricing, it is often more cost-effective than relying on an internal HR team or solitary office manager responsible for people management needs in the long run.
Conclusion – Choosing the Right Human Resources Company
The type of human resources company you choose directly impacts the efficiency of your team in delivering projects on time and keeping clients satisfied, as well as making sure your people are satisfied with their work. From recruitment-focused firms to comprehensive solutions like Inject, each offers its unique benefits. We encourage you to assess your current HR needs and consider how a tailored HR solution could suit your business.
If you’re looking to explore tailored HR solutions that align perfectly with your business objectives, contact Inject today for a consultation. Let us help you create and maintain a high-performing team that meets your business aspirations.
