Change is an inevitable part of doing business.
Among these changes that businesses undoubtedly will encounter at some point is the need to efficiently and quickly scale up. On one hand, this is a great position to be in. It usually means things are going well in that the market is favorable, your product or service is proven, customers are happy and demand is high!
But what happens next? In short order, you’ll often need to:
- Increase headcount
- Fill new roles
- Expand into new municipalities or states
- Staff new office space
- Serve more customers
- Enhance existing processes or build new processes to support broader-scale operations
This is where things start getting tricky and complicated.
Strategic human resources (HR) will be one of your organization’s greatest assets and supports during this time. In fact, your company’s strategic HR expertise is nothing less than critical in facilitating business growth and helping to avoid common pitfalls and challenges that can plague organizations trying to scale.
So, what do we mean by “strategic HR?”
It’s much bigger than the tactical HR functions we tend to first associate with HR. (Tactical HR refers to routine, day-to-day administrative tasks, such as processing employee paperwork and handling payroll.)
Instead, strategic HR encompasses big-picture, wide-reaching activities that prepare the organization for the future, add long-term value and enable the business to thrive.
In this blog, we’ll discuss the human capital needs that arise as companies grow and how HR is an important partner in addressing these needs. How well you do HR can determine whether your company’s growth happens as quickly and cost effectively as desired and is ultimately successful.
8 ways HR helps facilitate strategic expansion
1. Align HR with business strategy
It all starts here.
Everything that your HR team does should be to support the overall business strategy and goals. There must be a clear link between where your organization wants to go and which actions HR is focusing on, prioritizing and taking to make it happen.
At its core, HR is anything impacting your people – and people are the most valuable asset of any organization, especially during periods of rapid growth. They make or break your success.
2. Engage in strategic workforce planning
If your organization is scaling up, you don’t just need more bodies in seats to meet growing demands – you need the right people in the right roles, with the right skills, at the right time.
How do you accomplish this? With strategic workforce planning.
Look at your organizational chart and perform a current-state analysis and employee skills assessment to confirm where you are right now. Compare this to where your organization needs to be to achieve desired growth.
From there:
- Identify crucial skills and roles.
- Which skills and roles are most relevant to the products and services your organization is delivering now?
- Which skills and roles will best accommodate the demands of growth and accelerate the organization’s ability to deliver on key promises?
- Which skills and roles will disproportionately drive the success of business goals and the overall strategy?
- Which roles can be minimized or merged into other roles with little risk to the business?
- Which key roles are currently missing from your org chart?
- Pinpoint how many people you need to address a certain skill, or how many people need to fill a specific role.
- Determine whether skills gaps exist.
- Can your current roster of people perform the work that needs to be done going into the future?
- Or, does a gap exist between what your organization will be producing going forward and what your employees can offer?
- In addressing any gaps, it more time and cost effective to develop employees internally or hire externally?
- Select people on your team for an expansion in the scope of their responsibilities, or choose employees to shift into new roles. This may involve additional training and development to upskill employees – or reskilling employees entirely.
- Talk to employees regularly in one-on-one meetings to discuss their interests and goals and engage in career pathing. This helps you understand which employees are primed to make a move into a new role or even into the ranks of management. When organizational needs align with employees’ personal preferences, that’s a win-win!
- Continuously engage with active job candidates and inactive, potentially high-value employees so you can build a pipeline of talent that meets organizational needs. This ensures that you have pre-existing communication and relationships with qualified, desirable employee prospects, rather than starting the recruiting process from scratch each time the company needs to fill a new role and address a missing skill, or when the company needs to grow rapidly.
- Ensure leadership continuity.
- Establish a high-potential leadership program so you have a bench of future leaders identified and ready to go when the time is right to meet organizational needs.
- Engage in succession planning so that critical leadership roles are never left unfilled when someone unexpectedly leaves.
- Continually look ahead to forecast future workforce needs and make adjustments as needed.
Strategic workforce planning will prevent:
- The feeling of being caught off guard and unprepared when staffing needs change.
- Stalled progress in expansion, and therefore an inability to meet performance standards, achieve goals and realize success.
- Rushed hiring decisions that result in hiring the wrong candidate.
- Placing employees into roles for which they’re not well suited, leading to unnecessary stress on them and potentially higher turnover.
- Under-hiring, which can increase the workload and pressure on current employees, leading to burnout and a negative work environment.
- Over-hiring, which can result in near-term layoffs and damage your company’s reputation.
3. Optimize organizational structure
Similarly to assessing roles and skills, you’ll need to examine your organizational structure as your company grows. This ensures that your departments and teams are organized in a way that aligns with scaled-up operations and puts your business in the best position to meet current needs and goals.
Consider:
- The efficiency of your daily workflow and how you do business.
- How well certain departments and teams work together, and how certain skills complement each other.
- How to reduce silos.
- How well customers are served.
- The breadth of regions that your business covers.
- The type of structure (grouped by function, region or product line, or a vertical or flat hierarchy, for example) that makes the most sense for where your company is today and where it’s going.
4. Ensure HR processes are scalable
Your HR processes – the means and practices by which your company manages people and their performance – need to support your organization, whether you have 10 employees or hundreds of employees.
Especially during a rapid expansion, review HR processes to ensure that they are:
- Relevant to the organization’s needs.
- Supportive of organizational goals.
- In compliance with laws in all areas of operations.
- Time and cost efficient.
- Replicable across multiple locations.
- Aligned with workforce expectations in a range of markets.
As organizations scale, HR technology can be extremely helpful in realizing key process efficiencies, including:
- Streamlining processes.
- Automating certain processes to ensure consistency, reduce the need for manual intervention and improve the speed with which tasks are completed.
- Decreasing the risk for errors.
5. Help employees cope with change
Although company leaders think growth and expansion are great, employees may not feel entirely the same. For employees, growth and expansion can mean new opportunities, but also a lot of stress.
Fear of change – really, fear of something new and unfamiliar – is natural and happens to a lot of employees whose companies are in a period of transition, including scaling up.
One of your biggest priorities as a business leader is to manage the impact of growth on your team.
For example, employees may struggle with:
- Learning a new skill or process.
- Adapting to a new role.
- Juggling a larger workload and more responsibilities.
- Working with new team members.
- Living in a new place due to job transfers.
HR can assist employees in navigating change by:
- Approaching their situation with care and compassion and overcoming employee resistance. This can be done by explaining the big vision and the reasons behind change, helping employees to understanding why changes are necessary and how they support the future direction of the business.
- Communicating company updates regularly to keep employees informed and in the loop. Often, friction arises from lack of information, which contributes to fear of the unknown.
- Fostering a mindset of resilience among the workforce.
- Developing employees to acquire new skills and knowledge through a formal training and development program.
- Granting access to an employee assistance program (EAP), which can connect employees to resources targeting their specific stressors and needs.
- Training managers to check in on individual employees regularly to ask how they are doing, as well as discuss performance and workload in a supportive environment. Share burnout-prevention strategies.
- Establishing a feedback mechanism to give employees the opportunity to use their voice and share their concerns while keeping company leadership tuned in to how employees feel, so modifications can be made when necessary. Feedback can be obtained through:
- Regular one-on-one meetings.Town hall meetings with employees.General employee surveys (which can be anonymous).Focus groups.
- A designated email address or online form for sharing suggestions or concerns.
6. Manage the employee experience
Rapid growth shouldn’t deteriorate the quality of the employee experience or impact your culture negatively. However, if employees feel this is happening and they no longer recognize their workplace, you’ll soon be dealing with:
- Low morale and engagement.
- Higher turnover.
- Retention problems.
As your company scales, HR can help to preserve the employee experience by:
- Reinforcing the company mission, vision, values and culture to existing employees, and emphasizing these attributes in a robust onboarding process for new hires that gives them a comprehensive introduction to the company.
- Hiring not just for technical competency, but also for cultural fit to avoid any misalignments.
- Finding ways to incorporate flexibility into the workplace.
- Encouraging team building, cohesion and collaboration.
- Prioritizing employee wellness.
- Sharing techniques to promote an inclusive workplace.
- Reviewing benefits to not only ensure compliance with all new applicable laws, but to confirm alignment with worker expectations in a range of markets and offer a better employee experience for more people. HR can investigate plan options and features while working to contain costs.
7. Maintain compliance
Legal compliance is always a critical HR focus area – especially so when businesses:
- Increase in headcount.
- Expand operations into other municipalities or states.
- Begin hiring remote employees who live in other states.
In any of these scenarios, businesses are exposed and subject to more laws. Dealing with a variety of legal acronyms and employment laws across states and at the federal, state and local level can be incredibly complex. Furthermore, keeping up with the evolving regulatory landscape is a significant responsibility and a full-time endeavor.
8. Promote sustainable, long-term growth
When businesses scale, it’s easy to become trapped in a mindset that everything must happen at once or you risk falling behind. For example:
We need to hire 100 more people right now!
We need to open three more offices right now!
In reality, taking a more measured, paced approach will better ensure that everything you do is intentional and well-considered and that growth is more sustainable for the long term.
It’s important for any organization and its HR team to:
- Adopt key performance indicators (KPIs), those metrics and benchmarks that help you define what success is and monitor and measure your progress. KPIs should be aligned with business strategy and goals.
- Remember that scale can occur in phases, based on achieving certain KPIs.
- Make decisions based on objective data rather than gut feelings or in-the-moment pressure.
- Go back to strategic workforce planning, examining organizational structure and reviewing HR processes in rapid-growth periods. Make sure you’re adding the right resources or making the right changes at the right time.
How a professional employer organization (PEO) can help
If your HR team is smaller or more general in expertise and focus, scaling up and overseeing an expanded HR function can be daunting.
There is another solution: partnering with a PEO.
As the most all-inclusive, comprehensive HR outsourcing option, PEOs can handle as many HR responsibilities as a company wants to assign to them. This includes support for:
- HR strategy
- Compliance and risk management
- Recruiting, hiring and onboarding
- Employee engagement
- Training and development
- Talent and performance management
Additionally, PEOs can offer:
- Guidance whenever you need it on a range of topics
- Proven HR policies and processes
- Implementation of HR technology
- Benefits sponsorship
A PEO is essentially a plug-and-play HR infrastructure, through which businesses can swiftly adjust to changes in staffing requirements more cost effectively, in less time, with less risk. With PEOs, companies can:
- Access a team of HR professionals representing knowledge in a vast array of HR specialties – even those that may not be represented currently among their in-house HR team – and tap into that brain trust.
- Obtain HR assistance with a national reach.
- Avoid building out their HR department, which can be costly when several individual annual salaries and benefits are factored in. Instead, a PEO offers diverse expertise for one consistent monthly or annual fee.
- Offload many employer responsibilities to the PEO, which is a huge benefit as companies scale and become more complex.
- Gain proactive consideration of risks and HR needs.
- Maintain benefits quality.
Summing it all up
HR is a critical partner for any organization scaling up, helping to support business strategy and goals and anticipating and addressing human-capital challenges. Here, we’ve outlined eight ways in which HR can help rapid growth and expansion be successful, including strategic workforce planning to reviewing organizational structure and HR processes, overseeing change management and maintaining workplace culture. In all these areas, a PEO can be a valuable and cost-effective resource for enabling efficient scaling.
For more information on how to facilitate an efficient scaling process with a PEO, download our free e-book: HR outsourcing: An essential guide for fast-growing businesses.
