Expert Opinion: HR as ‘Insurance’ in Business Setup and Employee Management

When setting up a business and taking on employees, one of the most critical yet often overlooked aspects is the foundation of human resources (HR), Anne Begley from Stockport-based HR consultancy, Lomarton, explains.

Just as you wouldn’t drive a car without insurance or go on holiday without travel insurance, employing people without the right HR support is a risk no business should take.

Understanding HR Insurance

We’re not talking about traditional liability insurance like public, professional indemnity, or employee liability insurance. Instead, consider HR insurance as securing the support and guidance of HR professionals who can help establish a strong foundation for your workforce. This “insurance” ensures that your business is prepared for various HR-related challenges and can navigate them effectively.

The Role of HR in Establishing Foundations

1. Contracts and Legal Compliance:
   HR professionals ensure that all employment contracts are in place and legally sound. They help create clear, comprehensive agreements that protect both the employer and the employee, reducing the risk of legal disputes.
2. Job Descriptions and Role Clarity:
   Clearly defined job descriptions and role profiles are crucial for setting expectations and responsibilities. HR support helps in crafting these documents, ensuring that both parties understand their roles and contributions, leading to higher job satisfaction and performance.
3. Policies and Frameworks:
   Implementing robust HR policies provides guidance and structure within the organization. These policies cover a range of areas including workplace behaviour, leave entitlements, performance management, and grievance procedures. HR support ensures these policies are well-drafted, communicated, and adhered to, fostering a positive work environment.

Reducing Risks and Enhancing Growth

Unlike insurance, which primarily provides financial protection after something goes wrong, HR plays a proactive role in reducing the likelihood of issues arising in the first place. By establishing strong HR practices, businesses can:

Mitigate Risks

Effective HR practices minimize risks related to employee relations, compliance issues, and workplace conflicts. HR professionals can anticipate potential problems and implement strategies to prevent them.

Promote Retention and Growth

When employees understand their roles and feel supported by clear policies and fair treatment, they are more likely to stay with the company. HR support helps in creating a positive work culture where employees can grow and thrive, aligning their goals with those of the business.

HR Support During Crises

Just like insurance steps in when things go wrong, HR support becomes invaluable during times of crisis. Whether it’s handling a disciplinary issue, managing redundancies, or navigating the complexities of employment law changes, having experienced HR professionals on your side can make a significant difference in the outcome.

Conclusion

Investing in HR support is akin to taking out an insurance policy for your business’s most valuable asset—its people. By establishing strong HR foundations, you not only reduce the risk of problems but also create a work environment that promotes growth, satisfaction, and long-term success. Just as you wouldn’t drive without insurance, don’t employ without HR support.