Creating a Human Resource Management Plan

The Importance of Retaining Key Employees

Task:

Creating a human resource management plan: For this major project you are asked to develop a Human Resource plan/audit. You can think of this as preparing for a new business you want to start, or a review of the business where you currently work, or a review of a friend's business or non-profit. This major project will assist you with the business plan you will need to assemble in the MBA679 Business Plan & Launch course. Therefore, it has added value for you beyond this course.

Write the narrative and lists under each heading with sufficient detail and specificity that anyone who reads this can work with the document without you and make the HR function work well. For example, please do not use phrases like “We will comply with all EEO legal requirements.” Instead, explain what the legal requirements are and how you intend to ensure they are complied with. The length of the document will vary from student to student with an 'average' length estimated at 14 pages single-spaced. Bullet-point lists are acceptable where appropriate to present your points. The Human Resource Management Plan Bill Gates has said that Microsoft, which employees 22,000, would become an unimportant company if it lost its 20 best people. That’s why you need to address the issue of how you will attract and retain key employees in any enterprise.

The things that make employees want to come to work for you and stay vary from business to business. Bottom line, however, choosing an employer is a highly personal decision. That’s why it’s crucial to understand the individual needs of your key employees so that you can give them exactly what they want. If you only offer a higher salary to an employee whose most important concern is the option to work at a job offering flexible hours so she can care for an elderly parent, then you probably won’t retain that employee. Here are some of the commonly overlooked areas in a human resource management plan that actually drive a person’s employment decision: Salary or hourly compensation – While the business may be your “baby,” and you may be willing to work for sweat equity, your first employee will see the business as a paycheck. That means you will have to consider how you will pay them. Method of compensation payment – will the employee be on payroll, or will you contract with the employee.

Overlooked Areas in a Human Resource Management Plan

You need to know the pros and cons of both from the perspective of your business and the employee’s perspective as well Benefits – Paid holidays and sick leave, health insurance and retirement plans such as a 401(d) are among the key benefits most often listed as desirable by employees. Compensation – Salary bonuses, stock options, profit sharing and auto mileage allowances are among the most important compensation issues to employees. Work location – Does the employee have to work in an office, or can he or she work from home and “telecommute” to the office, thereby saving wear and tear on automobiles, and providing greater flexibility in work hours. Miscellaneous – On-site child care, flexible work hours, paid memberships to business groups or gyms, and holidays off are important considerations as well. The Human Resource Management section of your business plan should consider and address all of the above issues and describe the inducements you will offer key employees to encourage them to stay. It is also important to explain at what point in time certain HR things can occur. For example, you may have to start someone at an hourly rate when the business first starts, but you may be able to switch them to a salary in nine months after sales reach a certain level.

In a small company, an investor is likely to be very leery of a plan that appears to be based on the capabilities of a handful of employees unless the business owner has clearly given a lot of thought to keeping these important workers on board. The Management Team Section of your Business Plan (IF you are using this HR plan as a part of your final program Business Plan) The management team section of the business plan is often the section that professional investors read after the executive summary. Thus, it is critical that the plan depict the members responsible for key activities and convey that they are exceptional people with integrity, knowledge, and skills. The business planning process will help you identify what gaps exist on your team. It is rare that a founding entrepreneur has all the competencies needed to launch a successful business. Research suggests that ventures launched by teams are more likely to become sustainable businesses than those launched by individuals. For a start-up venture, as an example, many sharp businesspeople can identify a customer need, but don’t have the technology background to build a prototype. In these situations, it makes sense to recruit a co-founder someone who complements your skill set so that together you can fill the gaps on the team. For a start-up venture, in most cases, you cannot have a complete team right from the start. It would drain too much cash (presuming you pay them).

You need to be strategic and think about the two to five key people you will need to succeed. You also have to anticipate when you will need them. When building your core founding team, identify people that can multitask and are willing to take on lots of duties. Considering how important the team is to your company’s success, you need to present the power of your team as effectively as possible. Provide an introductory paragraph that talks about how the team came together. The subsequent subsections will provide the detail that connects the teams’ skills with the requirements of the business opportunity. However, if this is a mature business you may well have all the key people in the right positions. In this case, it is best to start by identifying the founding team members and their titles. The key is to convince investors that you have assembled the best team possible and that your team can execute on the brilliant concept you are proposing. Required sections of the Human Resource Management Plan are below. You may add additional sections you feel are needed for your business or organization. Cover Page Table of contents with page numbers 1. Leader/Founder background information along with information on any other key members of the management team. 2. Description of the business. 3. Mission, Vision, and Guiding Principles (or Ethics Code) for the organization.