How-To: Creating an HR disaster plan

Small business owners tend to be too busy to focus on the human resources side of their operations.

“I’ve always said that in small business HR is underestimated, overlooked and inconsistent,” says Glenn Nishimura, an HR consultant and owner of Nishimura Consulting.

A lack of HR planning could spell disaster if one of your key employees falls ill or one day decides to up and leave. But putting together a simple HR management strategy for your business can ensure you’re prepared to handle whatever potential staffing crises come your way.

“You can save yourself an awful lot of money up front by being a bit proactive,” says Frances Mote, owner of Niagara Street Consulting, a Toronto HR consulting firm.

Ounce of prevention

A bit of communication can go a long way toward heading off an HR crisis. Pay attention to the atmosphere around the office and check in frequently with your employees.

“You have to have regular conversations with your staff to find out how are they feeling,” says Nishimura. “Are they happy? How are things going; can they give you feedback to make the company and their jobs more successful?”

He says many small business owners don’t have these regular conversations, and find themselves “blindsided when someone hands in their resignation on a Friday afternoon.”

Take precautions

It might not be a dissatisfied employee resigning. A valuable staffer could fall ill, get a better job offer elsewhere, or even need to be fired suddenly. If he’s the only person who can handle his job, you’re in trouble.

To avoid this, Mote recommends setting up a shared document and collaboration system, such as Task Force or Yammer.

“If someone leaves the company or is incapacitated, you’re not having to find their username and password and dig through their hard drive to find files,” Mote says.

Also have your employees document their processes and workflow.

“Find out what they do at tax time, where they keep important files and information, even where they store keys and phone numbers,” she says.

Identify key players

Identify key players and roles in your organization, such as top sales people or members of staff in charge of finance, then ensure there’s a backup in the office — someone or a team of people who can take over the role if need be.

“If it’s sales, it could be team selling, or you could double up on sales people, or the owner could go out with the key salesperson,” says Tiffany Goodlet, a managing director with HR consulting firm Verity International.

Build a succession plan around those key roles, whether it’s top finance and sales people or the owners of a business themselves.

But also keep a retention plan in place for those key players.

“Do risk assessment,” says Goodlet. “What are the chances they’re going to take off? Do you need to be speaking to them about what’s important as far as their career goes?”

Damage control

In the event a key employee does take off, it’s helpful to know where you can go to find a temporary replacement.

“Ask other businesses for recruiters they use,” Mote suggests.

And consider your other staff as potential successors.

“You could move an employee up into the role and then source a backfill for them,” she says.

As business owner, you should also reach out to existing customers to reassure them that, despite the departure of a key employee, things are business as usual; then see that new relationships are established with any replacements.

Replace with care

Do your due diligence on replacement employees. The last thing you want is to do everything again two months down the road because of a careless hire.

“The cost of replacing someone in Canada is something like 100-150 per cent of the base salary,” notes Nishimura. That doesn’t include the cost of lost productivity.

So, before you go searching, be sure you have a clear sense of what the person is supposed to do for your company, how you want it done, and how you can effectively communicate these expectations. And have some kind of training/orientation program for new hires to ensure they’re aware of company policies, procedures, culture and values.

Plan ahead

Once your staffing crisis has passed, developing a long-term “people plan” should be a top priority, says Nishimura.

Determine your company’s goals for the next five to 10 years — how much do you want to grow? — then develop an HR plan to reach them.

“You want to look at your existing workforce and decide where you want to go,” Mote says. “It doesn’t matter whether you’re five or 500 people, you need to know what your recruitment and retention strategy is, and how you’re going to manage performance and development of key people going forward.”