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A HR consultant can provide peace of mind for SMEs

There was a time when labour relations for SMEs in this county was relatively straightforward. If you treated employees fairly and with dignity you couldn’t go far wrong. That is still the case but our understanding of fairness and dignity has changed over time and is increasingly subject to legal definition.

I came across a quite striking example of this recently. A small company had unwittingly fallen foul of the Organisation of Working Time Act. This arose because overtime had traditionally played a significant role in the way the company carried out its business. Everyone was happy with the arrangement; it meant extra money in pay packets for staff and allowed the firm to manage a degree of unpredictability in its sales profile.

Nobody really noticed that the extra hours had been mounting up in the wake of the recovery. The workers concerned were happy to make hay while the sun shone and the firm’s management was equally happy to reward staff for their loyalty during the lean years.

But the levels of overtime worked breached the act. This may not have mattered so much if the company hadn’t also unwittingly found itself potentially on the wrong side of equality legislation. It turned out that all the workers earning the often lucrative overtime were male and no female workers were involved.

There was an entirely innocent explanation for this. The company had been in business for decades and the overtime arose in the production area which was entirely staffed by males. This situation arose because the company had been around for decades and enjoyed very low staff turnover in the production function. There was no deliberate “no females” policy or anything of the kind. An accident of history had resulted in the imbalance.

Workers in other areas of the company, not unreasonably, questioned why only one group of workers – all male – should benefit when the company did well. This started as mere disgruntlement but an inelegant response from the company almost landed it in the Workplace Relations Commission.

This could have been very damaging for the firm. Had word got out that it was involved in such a case it would have harmed its reputation among its customers, many of whom are multinational firms with a strong commitment to diversity and inclusion both inside and outside the workplace.

Fortunately, the owners took action before it was too late. Part of the problem was that the company had never had a formal personnel or HR function. It regarded itself as too small and the finance department look after that area. The owners resolved to hire in expertise to deal with the immediate problem and make recommendations for the future.

That’s where I came in. The solution to the immediate problem was relatively simple. Overtime was reorganised to meet the terms of the legislation and a company-wide quarterly bonus scheme was introduced for all staff.

The overtime situation was tackled by the introduction of some part-time workers who could pick up the slack at busy times at no additional cost to the company but not causing a severe reduction in overtime payments to existing staff.

The bonus mirrored arrangements in the hospitality sector where all staff share in the service charge regardless of whether the work front-of-house or not. This was introduced following a number of town hall style meetings with employees where the scheme was explained and the owners accepted that a degree of unfairness had been allowed to creep into previous arrangements.

Crisis averted and problem solved. For now. But what about the future? What was to prevent the company from falling foul of legislation again at some stage?

The easy option would have been to recommend the hiring of a full-time HR specialist but this wasn’t justified. Instead, a handbook was prepared which set out guidelines for most routine HR issues such as holiday arrangements, sick leave, compassionate leave, disciplinary and grievance procedures and so on.

Alongside this, it was recommended that the company outsource its payroll function freeing up time and resources in the finance department for one member to take a more proactive role in HR. That staff member is now taking training courses in HR and industrial relations and the chances of the company ever even potentially breaching regulations or legislation have been minimised almost to the point of elimination.

An assignment of that nature typically takes around four weeks and the payback to the company is immediate. In this specific instance the company has not only resolved the problem at hand but it has also noted a marked improvement in productivity following the implementation of the solution.