It's often said staff are the biggest asset in most businesses. Amy Phillips, from Horizon Management Group, shares some of her expertise to help business owners better manage this extraordinary but often underutilised asset for the benefit of the business and the staff.
@amyphillips from www.horizonmg.com.au is a #HumanResources specialist.
Amy worked in HR for over a decade before taking over the Horizon Management Group, a #familybusiness her parents had started over 30 years ago, in 2018. At @horizonmg she works with clients to help them manage their people for the benefit of the people and for the business. Our real focus is on giving managers the skills to be able to manage their people well.
We talk about;
Michael Kerr: Hi, it's Michael Kerr here, presenting Small Business Banter. A healthy micro and small business sector means a successful economy and a more vibrant society. Small Business Banter is about helping regional business owners better prepare for current challenges and the next stage of business success. I'm Michael Kerr, founder of Kerr Capital Advisors to business owners.
Each week, I interview a fellow small business owner or an expert, and they share their stories, their lived experiences, the wins and the losses, and their best advice to help you, the listener, get the most you can from your own business. Small Business Banter is brought to you from the studios of 104.7 Gippsland FM and is heard across Australia on the community radio network. And thanks also to Kerr Capital supporters of the show.
So, welcome into another edition of Small Business Banter radio. Amy Phillips, from Horizon Management Group, is with me today. Welcome, Amy.
Amy Phillips: Hi, Michael. Thanks for having me.
Michael: That's lovely to have you in. Amy is an HR specialist, Human Resources specialist. I guess the theme of today's discussion is the importance of managing teams. Managing people in just about every small business is the most, you know, essential and important asset. So, we're going to drill right down on how she works with businesses to do that. Amy, do you just want to give us a minute or so on your background as a business owner, as well as an expert in HR.
Amy: Yeah, of course. I have worked in HR for, well, over a decade now. Working in some larger organizations, simply re-established Horizon Management Group in 2018, which is a family business. My parents started it over 30 years ago, and we work with our clients to help them manage their people for the benefit of the people and for the business. So, our real focus is on giving managers the skills to be able to manage their people well.
Michael: Managers are known as yeah[?].
Amy: Yeah.
Michael: Yeah, and it's interesting-- it is a second-generation family business that you run as well, your parents started it. And so in terms of the philosophy that underpins the work you do, you know, I'm trying to get here to that idea that in a lot of businesses, if not most, get people are so critical and so important. Is that an underlying philosophy of why you do what you do at Horizon Management Group?
Amy: Yeah, absolutely. And we sort of-- our belief in terms of what HR is all about is around improving the capability of an organization through its people. A lot of people say that a lot of businesses preached that people are our most important asset and absolutely they are if they are the right people. And how do we get the right people? And how do we motivate and engage them to deliver on what they need to be doing? And to be satisfied and enjoy what they're doing, so they keep on coming back and delivering that for your business and get that personal satisfaction from their role as well.
Michael: Yeah, so it's kind of like a, you know, it's a two-way thing. Not a two-way thing, but it's a dual thing-- get the right people in and then also ensure they also get the level of satisfaction of, you know, from their role as an employee. Okay, the work I do every day, look at preparing businesses to sell, and it's always about people. So the other part of the analysis I always do is if you-- look at you, just crudely[?] at a financial level, your biggest cost is also people, and I suppose you can look at it as a cost. You can look at it as that big expense line and an area where you can maybe get cost savings, maybe get efficiencies and better performance, and better commitment, and all sorts of things. So, when we just talk HR, Human Resources is a term that we hear a lot. How do you define that firstly?
Amy: Yeah, there are different views of it by different people, different types of organizations, different industries knew it differently. And I think, probably the best way to summarize some of those-- the key areas that it covers, if you like, is around how do we first attract and select and engage people? So looking at the employment side of things, how do we train and develop those people so that they can deliver on the role that we've engaged them to do. How do we then manage, and measure, and review their performance and give them feedback? So they can keep delivering on that. How do we recognize and reward that performance and not just monetary things so that people can get that that need of recognition which every human being requires, whether we want to admit it or not? How do we manage their career and development through that life cycle of their own career, both within your organization and acknowledging some of their bigger pictures and aspirations? And that ends up being a bit of a cycle. So then hopefully, that person is continuing their career with our businesses, and we can then move them into giving them more responsibilities or other positions and back to that training and development element, and the cycle continues. And, really all of that is focused on how we continue to improve the organization's capability through its people.
Michael: What are the biggest, you know, in Australian small businesses there's this sort of, I guess, a great culture of building a business and do it yourself and be resilient and do all the hard yards but is it sometimes difficult for owners or senior managers to let go of bits and to trust employees? I say that a bit, but is that something that you think is a bit of a barrier or a hurdle to really progressing the total organization?
Amy: Yeah, absolutely. And unfortunately, we see it a lot, and we see it when it's been left a little too long, and businesses, I suppose, if they aren't really conscious of some of those costs of getting HR wrong and the benefits of actually investing some time and energy in managing that performance and satisfaction of their staff, the productivity costs are huge and likewise, with the recruitment costs, which I'm sure we can go into later. But even with a small business, with one employee, without stating the obvious, that's 50% of your organization. If they're not delivering the service to your customers that they need, if they're not delivering on some of those outputs. You haven't defined what's expected of them, the impact is huge and business owners do often oversee it.
Michael: Yeah, it's magnified. And in the small environment, it's very palpable which is not healthy. And I mean, we're going to get to it shortly, but there are even more complex issues at the moment with all the restrictions. But it's always been an opportunity or a big risk for an organization to get that HR strategy, right? You know, we tend to have a lot of dominant owners or strong owners or strong managers who do an incredible job of growing an organization, but they span all sorts of functions. And I wondered, do sometimes HR not get a look-in or not get the attention because there are more demanding functions to take care of sales or financial reporting or whatever? Do they get the attention that it really deserves?
Amy: I'm probably going to stand, yeah, is somewhat biased and critical here. In our experience and unfortunately, no, it doesn't, It doesn't get the attention it deserves and we would always stress to business owners, just as you do your-- as you say, Michael, just as you do your financial planning, and your sales planning, and your marketing planning for the year, you need to do your HR planning and think about those individuals, what are the skills and capabilities that you need to deliver on those bigger business objectives. How are you going to engage and motivate and develop your people for the year? And there are some really critical actions that businesses need to take to deliver on those things because that the productivity and the costs are huge otherwise.
Michael: Yeah, I guess with HR-- well, with finance, it's understood that you often outsourced bookkeeping and financials and that's built into the way businesses operate, or a lot of them. Maybe not the same with HR, sometimes to have somebody fully responsible or looking at HR, does it mean you've got to have somebody internally do it or there are options to outsource it like your bookkeeping or your web management or something?
Amy: Yeah, there are definitely opportunities to do that. And I suppose, firstly what I would like to reiterate is that you don't need an internal HR department or a permanent resource or a massive corporate budget to be able to deliver on some of those critical elements of HR. And if we look at outsourcing though, in terms of outsourcing the HR function, there are some aspects of HR that might be suitable for a business to outsource. For example, getting some help on recruitment, having an outside organization that manages your payroll, and using outside organizations to provide training for example. But all the time we need to remember that just because we can call that outsourcing, we're still responsible for it and making sure that it fits within what we're trying to achieve as an organization. We still need to stay close to it. Make sure we're recruiting the right people and making those final decisions, you know, make sure our outsourced payroll provider is paying our people properly, training our people to make sure it's in line with those overall plans as well.
Michael: Yeah, it's interesting you say that it's HR-- there's a lot to it and it's I've kind of grouped it all. But even there, you've explained that there are probably components that would naturally lend themselves to being what, you know, payroll. If you got an organization of a size, it's arguable whether you should be investing resources, and that led on really to a kind of a massive trend of the last 5, 10, 20 years even of outsourcing. And this drive to kind of get away from having full-time employees to having outsourced contractors or subcontractors, and how does that impact the typical small business in terms of managing their still-- as you said, they're still a critical part of the team, doing the same work is just as important as done by maybe a subcontractor or freelancer versus an employee.
Amy: Yeah, that is the whole other sort of complex area. You're right. If we talk first to the engagement and the performance sort of perspective of it, one that responsibility still sits within the organization. And there is still a business owner or manager responsible for managing that function. It does become a little bit more challenging to get the same level of commitment to a certain extent if an element is outsourced or subcontracted. So, businesses need to be aware of that. But in terms of, unfortunately, and it would be remiss of me not to mention it, the whole concept of subcontracting and contractor relationships is a really complex area and there are risks. And I mean, even as a business owner myself, I see the challenges, I see the pros and cons of having subcontractors versus employees and there is a place for both. But we just have to be really careful as to ensuring it, reviewing those things regularly and defining those relationships appropriately, and treating them as such.
Michael: Yeah, and if you're in business for your own reasons to drive the sales or grow the organization, you can't subcontract out totally the responsibility for performance. I guess you just gotta remember that all times, it's not a simple or an easy solution. In today's edition of Small Business Banter, we're talking with Amy Phillips from Horizon Management Group or HMG. Touched on just a little while ago, Amy, but really topical issue of the moment with all of the disruption everyone knows about managing people that are working, employees, and others that are working remotely. And so, what is happening? What's your experience of how that's impacting businesses and owners and senior managers at the moment?
Amy: Yeah. We thought it was just a 2020 thing but it's continuing on with going through various stints of it, all across the country, and apart from some of the things that might equip appear quite obvious like looking at engagement and how do we motivate? How do we look after that stuff-- well-being through a lockdown and generally just finding good people. For those businesses that are growing, finding good people is currently a real challenge. So along with those things, we're also seeing that it's really important to help our clients manage a range of other risks that we're seeing in businesses as they continue to regroup after these various stints of lockdown. And some of those risks and challenges we've identified are not everyone returning to the workplace or to their job and there's this concept of hybrid teams that you mentioned. So how do we bring in new team members and agree with new ground rules with this sort of new environment? Also, different skills, knowledge, competencies may have been developed or might be needed now following the various lockdowns and we need to be able to plan for this and make sure you're not losing key players by not recognizing those things. Ways of operating might have changed so how do you manage different processes and behaviors now? And then lastly, ways of thinking might have changed and how to harness new ideas, maintain that motivation, and appreciate that movement in employees' state of mind as well. And sorry, there's actually one more that I forgot to mention around the changing business goals. So businesses need to recognize that, they need to be able to be part of HR is how do we set expectations and manage those. So, setting those new expectations for the business. Communicating that new direction in that focus is really important too.
Michael: You just see how enormously complex it is. I mean, managing employees anyway is complex based. People are, you know, it's something that can kind of shape or otherwise the performance of a business. So you made a couple of interesting things I wanted to drill down on. From an employee's perspective, there's a massive adjustment as well but for the owners and the managers to take that on as well as dealing with all the uncertainty, you can just see how taxing it is. And you know, I don't know what we do. But anyway, acknowledging it and getting some advice, I suppose, which is a pretty obvious one. The other thing that was really interesting there was there are businesses that are doing well and growing and you're saying that some of them are struggling to find employees. What's driving that? I know in saying hospitality, it's always been challenging to find a chef, a good chef. And now it's near impossible. And even staff to work in cafes, and I'm fascinated as to why that's going on? And you'd be much better place for me to answer it.
Amy: Our understanding and we have a small sample of the population that I suppose I can talk for in terms of recruitment not being our-- we're not doing heaps of it that we do to support our organization. Our clients seem in doing that. And what we're finding and sensing is that there are people who are hesitant to move in these uncertain times, people who may well be otherwise quite active candidates are hesitant to make the jump because of less job security I've [inaudible] in a new position. And also for some skilled positions, there is less migration happening which is actually even seeing some of those skills and capabilities coming into the country. And of course, we had a big exit of them at one point as well. So they're probably the key things and I think it is just a matter of the current situation and for those businesses who are really looking to get in some-- as their business has changed, they need those new skills and capabilities in some cases. Then they are finding it quite challenging to...
Michael: Right. And there's maybe a flip side that other organizations are keeping. They're sensing people want security and maybe making a greater effort to keep them because I'd only have the same problems if I lost them.
Amy: Quite possibly, yes. And I think Covid has been very-- it's sort of redefined HR to a certain extent this pandemic in terms of the value that's been placed on some of the initiatives that HR can bring to an organization and the impact that it can have. So yes, businesses have certainly stepped up their game in some of those areas.
Michael: Yeah, maybe some of the businesses will come out different and bigger and better at the end of this. But let's not focus too much on when and where. I get that you approach HR from the point of view of employees that, you know, key asset. Got to get that right. So, what are the practical thing like the top two or three things? I know we've covered a bit of ground[?] but if you had to say, what are the two or three things that-- here, I am talking about the average or typical small business which might have employees somewhere between 1 and 10. What are things they can do and even if it's a case of just reminding them that those people are their key assets? So things go really good, that's great. If they go really bad, it's very obvious and very uncomfortable in the workplace. So what top two or three things to really just takeaway for someone to go-- I mean, to rethink how I do this and make some change or do things differently.
Amy: Yeah, sure. I think, might just stop super quickly in terms of like, what are people-- what are the basics? What are people looking for in their jobs? Because some of those things are around reasonable pay. They want to work in a convenient location, have a safe environment, a good match for their job and their skills. And of course, competent management is a really key one as well. But good talent and those that are in demand, they're looking for something that's more than the basics because they can and we need to engage [crosstalk].
Michael: So, the basics, you mean, more than the salary package or the...
Amy: Yeah, more than the pay, more than the environment, the location, all those sorts of things. So what I think, any organization can start to have an impact on now is thinking about more than those basics, which I would suggest around the direction. People want to know where they're going. So how can a business owner really communicate? What is the vision of the organization is and where that individual fits into achieving it? Giving them some clear expectations and guidelines as to how you want somebody to behave. So that can be as simple as a position description and defining some company values or behaviors and they don't have to be over-engineered, they can just be some key things that help people understand how to fit in so that they can get that satisfaction and feel comfortable delivering on their role and that they're doing it in the right way.
Michael: Well, and is that-- there are organizations businesses that don't have something as straightforward as a position description and a bit of a vision of where the business is going?
Amy: Absolutely. We see it far too often.
Michael: Right. Okay. So that's just an excellent point to start. You could almost take that for granted, that one.
Amy: Yeah, and there's been lots of research around it just in terms of going that next level to setting expectations. There's been some Gallup research around that they found that only about half of all workers strongly indicate that they know what's expected of them at work and that's pretty scary. If it's possible for organizations that only 50% of your people actually know what's required of them and a delivering on what you might need them to do if you've actually defined that in the first place.
Michael: Yeah, so it sounds like it's a very broad term. A good employee more than the hygiene factors of very important hygiene factor, salary, location, but to want to understand where the business is headed or the organization is headed, maybe that goes to security, maybe it goes to just wanting to be part of something. And we all get it, most get a purpose out of going to work beyond just the obvious. Just coming up to the end of our time, I mean, unfortunately, that was a really wide ranging and very helpful discussion on a key area of focus for a lot of business owners and senior managers in organizations. So, thank you very much for coming on today. Do you want to just shout out the website for your business and if people want to track that down and have a look?
Amy: Yeah, absolutely. We're at Horizon MG, the management group. So, horizonmg.com.au, you can find us.
Michael: All right, excellent. Thank you so much for your time, Amy. And you're at the center of some fascinating issues at the minute, you know, in the midst of our challenges. So, well, thanks for your time.
Amy: Thanks, Michael. You too.
Michael: So that is all for today's episode of Small Business Banter. I continue to be inspired by bringing you small business experts and other small business owners and hearing their stories. Do you want to listen to any past episodes? Jump onto your podcast platform of choice and search Small Business Banter. There, you will find a diverse and fascinating collection of small business owners and experts, openly discussing and sharing their experiences. For any of the links, resources, or information we've talked about on the show today or to contact me, please head over to smallbusinessbanter.com or you can find us on Facebook and Instagram. And it would be great to have you tune in the same time next week for another episode of Small Business Banter.
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