Human Resources’ Role in the Business Life Cycle

by Chelsea Jensen, MBA, SHRM-SCP, PHR, Human Resource Services

Bulletin,  HR Expertise and Support

Picture this: you wake up in the middle of the night with the brilliant idea that you want to start your own business. For years, you have had a passion for making computers and you believe that your business could be more successful than anything the late Steve Jobs could have imagined. Although it is late, you jump out of bed and start drafting your business plan. While there is a lot to think about, you know that factoring in Human Resources (HR) will help your business in many ways, even if it does not succeed.

Starting up- You have relationships with people in the computer industry and believe they will want to join your new business; however, you will need to hire additional help. HR can make sure you hire candidates with the appropriate knowledge, skills, abilities, education, and experience. You do not have time to waste hiring the wrong person. How will you pay your new employees? Without a compensation system, candidates may ask for unreasonable salaries. Further, how will you classify jobs as exempt or nonexempt? HR can devise a compensation plan that fits your new business and make sure it is legally compliant.

Growth- Many consumers are interested in your new computer product as it offers the same features the Apple computer does, but costs less! Your business’s competitive advantage causes it to grow significantly. As the company grows, HR will help the business comply with numerous state and federal regulations (i.e., when you reach 50 employees and become covered by the Family and Medical Leave Act). HR can also benefit the businesses in the growth phase by identifying training needs for existing staff. HR may conduct a needs assessment for the current workforce to determine the skills, training, and employee development necessary for the company to prepare for growth. Developing staff can be much less expensive than hiring additional staff or more qualified candidates. In addition, this strategy could reduce turnover and improve employee retention.

Plateau- Your company has been making consistent revenue for the past 12 months, but it is not experiencing the type of growth it was before. Employee morale has decreased because of the subsided growth. HR generally owns the task of creating a more engaged workforce. This may involve creatively redefining work structures and realigning rewards. Further, HR, as a strategic partner, can help with the overall business strategy to stimulate growth.

Decline- Apple has launched a new computer product that your company simply cannot compete with. Your revenues are significantly declining and you know you will have to file for bankruptcy. Your employees will inevitably lose their jobs, but HR will be able to help. Aside from helping deliver the tough message to employees, HR can prepare the health care continuation paperwork for those losing coverage. Many employees will file for unemployment, and HR can manage the claims received.

Although the business was not successful, HR played a significant role throughout its life cycle. Where does your business fall in the cycle? As you plan for the upcoming year, think about how you can leverage HR to help achieve your goals and keep you out of the decline.

About the author
Chelsea Jensen, MBA, SHRM-SCP, PHR, Human Resource Services

Chelsea is a consultant in Employers Council's Human Resource Services department. She works with employers on issues such as policy development, employee relations, and benefits. She also conducts training for HR and management professionals. Prior to her work at the Council, Chelsea was a Benefits Specialist at a large bank in Buffalo, NY. She received her MBA with a concentration in Human Resources from Niagara University located near Niagara Falls, NY. Chelsea has been certified by the Society for Human Resource Management as a Certified Professional (SHRM-CP).