Maximize ROI.  Minimize Risk.

By: Jackie Herndon

In these difficult economic times, most businesses are looking for the most "bang for their buck". Consider the importance of Human Resources (HR) through sound policies in education, training, health, and employment at all levels. By properly managing HR, businesses maximize the return on investment from the organization's human capital and minimize the financial risk. Developing policies and procedures is a cost effective necessity for business owners. In business today, there is liability associated with employing workers and the consequences of not being prepared can be devastating. At Hendrickson Business Advisors, we believe that reducing the possibility of liability through sound polices and procedures is fundamental to good cost management.

What are policies and procedures? Policies are a deliberate plan of action to guide decisions and achieve rational outcomes. Policies guide decision-makers on how to handle day-to-day operations. Procedures provide the employee with a clear and understandable plan of action required to carry out the policy. A well written procedure will eliminate common misunderstandings while establishing boundaries for the employee. Managers are then able to control events in advance and prevent costly mistakes.

Large businesses typically have a designated employee in HR dedicated to ensuring that polices and procedures are aligned to form a strategic link between the company's vision and its operations. Conversely, the HR functions in small businesses are usually assigned to those within the business as an additional duty. Business owners and managers often view the time spent in developing these policies and procedures as time taken away from revenue generating operations. Since it's not a full time job in a small business environment, these responsibilities are a great candidate for outsourcing.

Businesses with established policies and procedures understand the regulatory requirements and the serious consequences for failure to comply. They see the benefits in their employees carrying out their jobs and making decisions within the scope of their assignment. Employees understand their jobs without trial and error and that enables the workforce to clearly understand individual and team responsibilities. These benefits alone free up managerial time, offer expertise and often result in substantial cost savings in today's competitive market.

Consistency in the day-to-day operational activities is essential. Policies and procedures need to be reviewed regularly especially when there is an increase in accidents, higher failure rates, costly overruns and more than normal questions from employees on basic operations. In our litigious society businesses must do all they can to protect their assets and ensure their viability in the market place.
We hope you find this information helpful in assessing whether your policies and procedures are adequate in today's business environment. If you are interested maximizing your ROI while reducing your risk through HR, Hendrickson Business Advisors can review your current business policies and/or procedures, assist with training and even advise you on your medical plan. Contact us today.