I have had many discussions with aspiring business owners over the past few years, and there is a significant number of them who hinge the success of their plans around human capital. Many frequently cite the investment needed to staff proposed businesses. For anyone sharing this sentiment, I am here to share an alternative to hiring your first group of employees.
Hiring employees offer a set of obstacles that are commonly overlooked or underestimated. The biggest and most obvious is payroll management. The wise business owner understands that payroll management is not one for novices; understanding of compensation and tax law is essential to establishing a work environment of choice. A sound human resource strategy is also key in connecting with potential candidates and current staff. Human resources correlates with creating an employee code of conduct and expectations. For some, that also means a disciplinary process. The chief concern in this regard is payroll budgeting for it can make or break a small organization. Compensation’s direct impact on the profit margin tempts decision makers to undercut the category for favorable profits.
The businesses that I have witnessed using the former staffing option often see the owners serving as both employee and administrator. While this is ideal for businesses with lower levels of operation, it provides a strain on those in high demand industries and stunts growth. The truth for all choosing this option is that operating and managing causes frequent conflicts. Partnerships can avoid this conflict by designating a member to serve strictly as a manager. Those designated to do so can monitor impact of operations without direct influence on performance. Be advised because partners performing operating duties are involved in a conflict of interests.
Independent contractors are an option that are not considered in many circumstances. In lieu of outsourcing or hiring, professionals can be contracted to performed specific duties. Contracted professionals provide services to your business that have the potential to increase the value of production. The independent factor is a downside as they are not obligated to follow operational procedure nor can their activities be delegated. These professionals are self-employed individuals providing a service to your business. They are generally required to do the requested duties in the predetermined amount of time for the predetermined rate of pay. Contracted professionals offer the best benefit for businesses that accurately assess strengths and weaknesses when determining what type of human capital is optimal.
Aligning actions to goals is the standard model for success. This is the same in regards of human capital management. If you would like to learn more about this subject, email us at firstname.lastname@example.org.