Considering an HR Manager for My Small Dealership: How Could It Benefit My Business?

Respected Seniors, I run a small two-wheeler dealership in a small town with around 35 employees. I am considering adding an HR manager to my team. How can this position benefit my business, and what steps should I take to proceed? Your guidance on this matter would be greatly appreciated. Thank you.

Before answering your questions, let me understand the following, which will give a clear picture of your expectations:

1. Why and how did you decide to recruit a Manager-HR for your small-sized business? What made you think of this?
2. What do you need an HR for? Are there any assignments that you have in mind for him/her?
3. How is the salary of your personnel being paid? How many functions are there in your company?
4. Who is currently taking care of HR tasks like recruitment, payroll, etc.?
5. Do you have any plans to expand your business as soon as possible?

Regards,
M. Kannan

You wanted to "add" an HR Manager amongst the staff members. I would like to add an important point here. Please also concentrate on the addition of proper HR systems and processes, and not just one more person or position. The person you recruit should only facilitate the execution of those systems and processes.

Therefore, may I ask you whether your HR systems and processes are ready?

Thanks,

Dinesh V Divekar

I do accept your point, and there is a need for a good system and processes for his business. But kindly let me know if he can have a good system and process in his small office, will there be a need for adding an HR in his business, which is very small in size?

Regards,
M. Kannan

"HR Systems and Processes" is a vast concept. If earnestly implemented, the position of HR Manager will have more than sufficient work for eight hours a day, six days a week. When I refer to HR Systems and Processes, it broadly includes manpower planning, recruitment, training and development, career planning, performance management, and other service functions of HR such as statutory activities, payroll processing, and various administrative tasks.

Organizational Culture Development

Organizational culture typically develops when companies are "small." As companies grow larger, it becomes increasingly challenging to alter the established culture. Often, when companies reach a certain size, they appoint a "VP of HR." However, by this point, it may be too late, and even VPs struggle to change the organization's culture. Hence, cultivating a culture that supports growth is crucial.

I have observed companies facing difficulties when transitioning from a Private Limited to a Limited company. Therefore, from day one, each company should operate as if it were a public limited company, while still maintaining the confidentiality of their balance sheet.

Importance of Implementation

While having well-defined "Systems and Processes" is beneficial on paper, the true essence lies in their implementation. Effective leadership is demonstrated through execution. India has a robust constitution; however, the challenges arise when proper implementation is lacking, as evident in daily occurrences.

I trust that I have provided the necessary clarifications to your satisfaction.

Thank you,

Dinesh V Divekar

It is indeed great to know that a small firm is also planning to have a separate HR department. But before we go further in setting up the HR department, we need to find out why.

Since your organization currently employs only 35-40 employees, I believe that no big systems or software are necessary, as these many employees can be handled individually over Excel. (I say this as I am exactly handling 40 people over Excel.)

Important Considerations Before Hiring an HR

The important things to ponder over before we bring aboard an HR are:

• What will be the roles of the HR person you hire? - Recruitment, Performance Appraisal, Attendance & Leave Management, HR MIS Handling, Employee Engagement, Grievance Handling, Statutory Compliance Handling, PF & Other accounts handling, Salary Handling, etc. It is very important to first describe what the person will do. Chalk out a job role for the HR person first.

• Who would the person report to? What is the hierarchy of your firm? Will there be dual reporting or reporting to a group of seniors?

• How is the person going to manage the people? I believe since you are a 2-wheeler dealership firm, the most important department to you would be sales. So, should the person be handling each salesman individually, or do you have team leaders and a sales manager as a point of contact for the person?

• What is the budget for HR activities? I do not mean to ask only the budget for the salary of the HR person or the salary of the other employees. How much are you willing to shell out if, in the process, the person suggests some motivational and inspirational ideas to be implemented to keep your sales team thriving for more?

Lots of factors go into designing an HR department, and honestly, handling HR is a similarly difficult task. It is true that on the face value, we HR people seem least busy compared to marketing, but that does not mean we idle away time. The kind of work HR does is all different and depends on:

1. Support from the management
2. Response from the staff
3. Budget of the company

Hope this will help you first chalk out a plan for HR and help you design the HR for your firm. All the best :)

I must at the very outset congratulate you for thinking about adding an HR function to your business. I am sure that you practice a business philosophy which is what makes you succeed—meaning a vision, mission, ethics, integrity, goals, value creation, and image—in terms of product performance in the market, etc., governing the tone of behaviors, decision-making, and priority-setting, as well as how communication is done internally and externally. Now, this can be done best by you; however, if you are going to do this, then what will happen to moving the business ahead? Therefore, it is obvious that you are looking for a person you would want to engage to carry out these responsibilities, sharing your philosophy. If you can relate to this philosophy, then go ahead with whatever is there in it for you.

This is by no means a comprehensive document. There is no limit to the creative solutions an organization can find to solve even its most challenging problems. Hopefully, you will find some advice herein that is relevant and helpful to your situation. You may find that you have additional ideas or advice, based on your own experience, which could be useful to others. This guide is simply a vehicle through which communication between such organizations can happen.

For any company to be successful, it must have a philosophy that all business functions participate in, and so Human Resources Management is a prime position. (I'm not sure if several business leaders would still accept this truth.) A good HR person can set the tone for any company to meet its business goals and enable it to meet all its responsibilities to all its stakeholders. Based on the vision and the chartered-out mission, HR creates a conducive and participative environment for all other business functions to incorporate into their day-to-day activities—beginning right from the top management down to production employees.

In our technology-driven world, Human Resources has become an advanced science...an art, some would say. Any seasoned HR person could spout methodology on how to achieve best practices in trying to meet the "philosophy" originally intended. But such methodology does not necessarily apply to small organizations as they are in a class of their own and face unique challenges when it comes to finding the right person for the right job at the right time. If this is ascertained and a person found, the next step would be the “Functional competencies” that you would expect from an HR person. These are job-specific competencies that drive proven high-performance, quality results for a given position. They are often operational in nature.

Competencies are used in human resources in a variety of ways: they describe the traits, skills, and behaviors for a job role, they are used to establish performance and development criteria for performance management, they are used in the assessment of candidates for a position, and they are used in the assessment of people for leadership and new roles.

The best practices in competency management involve four categories of competencies: company values (core principles) which apply to everyone, broad general competencies which apply to the entire company (e.g., communications, integrity, etc.), leadership competencies (characteristics and skills we expect of leaders in our organization), and functional competencies (job-specific skills which are very different from role to role). Competencies can be used for assessment, hiring, training, leadership development, succession, and many other important purposes. Each of these four types of competencies is used for candidate assessment, evaluation, coaching, development, and assessment of potential. Every organization, therefore, should develop competency models with the end goal in mind.

Based on this, to go a little further, there are many important functions; however, there are three crucial areas which make HR leaders. One of the major ways HR creates the environment is by encouraging employees to become and continue to be top performers. A second way HR sets the tone is by developing a diverse group of employees. HR must develop and uphold policy on diversity and other issues. Third, team building is essential to fuse a diverse group of individuals. In order for a company to reach its full potential, employees need to be top performers as individuals and as cross-functional groups. Employees should be invested in their positions.

HR can take the lead:

1. Recruiting candidates that are a good fit for the company and show potential for growth. Hiring new candidates with competitive salaries and benefits will make for happy employees who want to give their best. Using a workable performance review process, employees can gain an accurate assessment of their performance. Employees will be able to understand their performance levels and work on areas that need improvement. Management will also understand employees' desire for growth. HR therefore plays a lead role in performance benefits and giving positive feedback. In this way, employees will be able to realize their potential and will be able to take deliberate actions to have more say in driving their chosen career paths.

2. HR can lead by developing a diverse workforce. Equal Employment Opportunity refers to employment practices that ensure nondiscrimination on the basis of gender, religion, region, physical or mental ability, or age, etc. The principle behind this is that everyone should have the same access to opportunities. Any company worth its name needs to be flexible and adaptable to meet new customer needs; therefore, by developing a diverse workforce, a company can gain diverse views, especially when it comes to problem-solving. Managing diversity well provides a distinct advantage in an era when flexibility and creativity are keys to competitiveness.

3. HR is its team-building function. Team building can lead to several positive standards and make clear work objectives. The company will gain good communications with participants as team members and individuals. Departments will increase productivity and product creativity. Knowing exactly what is expected, team members will become more motivated to reach their goals. Having strong communication through team building will create a climate of cooperation and collaborative problem-solving; this will also increase trust and support from all employees. In many companies, there is wasteful spending because of a lack of communication. By having regular interaction between teams, a company will have better operating policies and procedures that can reduce costs. It also helps knowledge building and knowledge sharing.

In this fashion, Human Resources becomes the locomotive for the train called 'company,' of which the first compartment will be that HR will make sure the company recruits well-qualified candidates and ensures that they become happy and well-paid employees. The other HR functions—induction, performance appraisal, compensations and benefits, training and development, etc.—will make for the other compartments that can run on the rails of your company built on your philosophy—a lean running company that employees love to work for because they are well taken care of and in return they offer high productivity and creativity.

Having said this, it will also be appropriate to get the right person on board.

Characteristics of a Thorough HR Professional

Well-qualified, well-read, well-bred, excellent communicator with the ability to influence and persuade across all levels of the organization, exercising a high degree of confidentiality, professionalism, poise, tact, and diplomacy to accomplish objectives. Excellent written, verbal, and nonverbal interpersonal and communication skills. Solid interpersonal, project management, and presentation skills. Has and maintains a high standard of integrity & ethics; is aware of the business that the company prevails in, therefore is customer-focused, creative & innovative, disciplined; with a can-do attitude; aggressive in the pursuit of goals; results-driven; action-oriented, flexible and adaptable, change agent.

Going on a little further, looking into the future and your company, if it wants to get ahead of the race, you will have to hire a "smart, matured HR person," one who is a self-starter; highly organized; with a knack for complex problem-solving; has a strong analytical brain; strong in strategic management, who has the ability to work well in a variety of environments, and work well under pressure in a racy, speedy, dynamic, time-sensitive environment with shifting priorities and multiple deadlines. Also has the ability to be proactive and independently advance skills as required to meet rapidly-shifting job requirements in a fluid but rapidly-growing organizational environment. One who can steer away from complacency by effectively challenging and enhancing the professional development of others within the organization, at all levels drawing on an appropriate balance of assertiveness, tact, and respect.

• Possesses extremely good Communication Skills (Spoken/Written)
• Has Self-Awareness
• Is Proactive
• Can Multi-Task
• Has the Ability to Prioritize
• Is Enthusiastic
• Has Integrity
• Works well in teams
• Has Good self-organization and Organizational Awareness
• Is Effective in Problem Solving
• Has Self-Awareness, Proactivity
• Has the Ability to Influence
• Is Effective in Decision Making
• Shows Learning Agility
• Is Technically savvy
• Finally, is likeable by all.

It was lengthy, but I hope it clears up several issues, as some honorable members have already raised some valid questions to stimulate the thinking process.

Best wishes.

As per my advice, with over six years of experience in recruiting for automobile dealership companies, the recommendation would be:

Recommendation for HR Management in Small Dealerships

With a staff of just 35, don't hire a full-time HR Manager. Take the services of a process consultant to put your processes in place. Then designate someone to handle compliance or take charge yourself. Remember, your employees are your biggest assets, and that should be your mindset before addressing compliance issues. If necessary, hire a change agent for 3-4 months.

Can you provide us with the organization chart of your firm so we can determine whether it will add value to your business?

Regards,
Ukmitra