Red Flags for Your HR: Signs Your Business Might Have HR Issues

This is a guest blog, written by Amy from GroundedHR

In today's dynamic business landscape, aligning HR goals with overall business objectives is crucial for success. Human resources should act as a catalyst for business growth, enhancing performance, productivity, engagement, and agility in anticipating and adapting to change.

Now having an internal HR resource that can inspire, guide and embed HR practices is not something that small to medium businesses can afford. But as business owners and leaders there are indicators that you can learn to recognise that will raise a red flag to let you know it might be time to ask for help.

Here are some red flags to watch out for:

Listen to your employees

Listening to your employees is key. Pay attention to signs like increased complaints, gossiping, or a decline in work performance. Analyse this data to make informed decisions and address underlying issues proactively.

Turnover

High turnover rates can indicate underlying problems. Compare your turnover rates with industry averages. According to the Australian Human Resources Institute (AHRI) Work Outlook Report, the average turnover in the 12 months to March 2024 was 14%.  Use tools like exit interviews and employee surveys to understand why employees are leaving and what changes are needed.

Recruitment

Frequent recruitment, especially within the first 90 days of hiring, suggests inefficiencies in recruitment processes or misalignment with organisational goals. Are we testing the cultural alignment of the person and the business? Are we designing the position correctly? Is the onboarding and training process well structured? These are questions that need addressing for better retention.

Compensation

Competitive compensation alone may not retain talent. The AHRI Work Outlook Report also outlines that employers are expecting to reward employees with on average a 3.7% Wage Increase through to the end of 2024. Explore options like flexible work arrangements, training, and wellness programs to enhance employee satisfaction and loyalty.

What to do as a business owner

The biggest piece of advice that I can provide business owners is to create an environment where feedback and communication are the norm.  You need to ask for feedback and then demonstrate that you are able to receive feedback and act upon it keeping the communication lines open. 

The second piece of advice that I can give is to start collecting data.  You may not have a fancy human resources information system,  but we all have access to a spreadsheet like Excel.  Once you've set this up it will be easy to update regularly and it will give you so many valuable insights into what is going on with your people and how you can plan better for the future.

My final advice is to set some HR goals in alignment with your overall business goals.  By being intentional about your human resources small changes can make big differences in your bottom line and the overall culture of your business.

What to do if you're not the business owner…

So often in my experience, it's not actually the business owner that recognises a lot of these red flags.  it is often the executive assistant,  the receptionist,  the operations manager,  or the independent contractors such as a virtual assistant.  The people in these positions wonder whether it's their place to say anything. My question to these people is how would you feel if something went wrong and you hadn't said anything?

Sometimes as a business grows the owner can have their blinkers on.  Not on purpose,  but by necessity. They are trying to do all the things to grow a successful business,  but as a result, things are often missed and indicators are not seen. As an objective bystander you are gifted this insight and when we deliver feedback and observations with kindness and empathy, growth and change can happen.

My biggest piece of advice here is to approach these difficult conversations in an open way.  You're not trying to point the finger or say somebody is wrong, you are just trying to create an awareness of what you think might not be right. 

By being proactive and attentive to these red flags, businesses can address HR issues effectively, leading to a more engaged and productive workforce.

About our Guest Blogger

Hi, I'm Amy!

Qualified with a Bachelor of Business (HR and IR) and other certifications, my work in the HR field for over 10 years has been guided by my values of impact, leadership and authority, community, and expert guidance and advice. I have been dedicated to working with businesses like yours to maximise the potential of your most important asset: your people.

I understand that as a business owner, your passion lies in your area of expertise, not necessarily in managing people.

This is where I come in. I believe that HR can be intricate, complex, and overwhelming, which is why working with me brings immense value to Aussie businesses like yours.

You can connect with a learn from me, as well as find out about my services;

Website - www.groundedhr.com.au

Instagram and Facebook - @groundedhr.au 

Or send me an email at amy@groundedhr.com.au.