Is your small HR team fighting to consistently balance business with people contributions?  

The life of a Human Resources leader is rarely dull, always full of opportunities to be overleveraged by the challenges tossed their way. Having led HR teams both large and small, we've found that while business issues and requirements are often similar (e.g., pressures to produce sufficient and timely hiring, retention and engagement of the workforce), the challenges with smaller teams tend to be unique and/or magnified.

First, what do we consider a “small HR team? Indeed reports average HR-to-employee ratios of 2.57 per 100 employees for all organizations (closer to 1:100 for medium to large firms), while PeopleManagement reports that the majority (70%) of companies with an average of 1000 or fewer employees have 10 or fewer HR employees. In our experience, a team of several HR generalists and two to four specialists or administrators supporting either a smaller company or a division of a larger company is very common, with ratios well in excess of 1 HR business partner (HRBP) covering 1,000 employees increasingly commonplace.  

Keep in mind that in larger organizations, centralized shared services and centers of excellence (COEs) typically provide common-need support for administrative and related HR tasking, while in smaller companies some level of outsourced services (payroll, benefits, etc.) are similarly leveraged. In both cases, however, some level of local administrative or specialist support is needed, and balancing the daily tasks associated with that support against broader strategic contributions is the conundrum smaller HR teams regularly face.

The common issues smaller HR teams face

1. Balancing the strategic and non-strategic  

When evaluating their ability to meet requirements for strategic contributions that drive business objectives, a common refrain is the need to reduce ongoing or recurring administrative and specialist workloads. We have found that small HR teams still struggle to provide a full array of strategic services and plans because they get bogged down managing or facilitating recurring work related to employee relations, payroll, annual performance and merit cycles, HR systems, annual benefits enrollment, and so on.

2. Managing resource shortages

Sometimes, it is simply an overfull agenda combined with a team that doesn't have enough resources to manage everything required. Budget and staff cuts in HR may have removed certain capabilities that must be fulfilled elsewhere, if at all. It may be a canceled technology project that requires continuing (or reverting to) labor-intensive processing. Whatever the situation, sometimes there simply aren't enough staff and hours to accomplish everything required and desired.
    

3. Filling skill gaps

Probably the most common issue is a lack of expertise that exists on a small team. Given the nature of the HR business partner (HRBP) or generalist role, the more of these you have, the more likely it is that most have breadth of experience rather than depth, depending on their career arcs. Consider how many smaller HR teams lack deep, local expertise in organization development methodologies, alternative rewards, executive development, advanced people analytics, etc. While those topics may not require ongoing management, when they do arise, a small HR team often feels the pain acutely.
 

4. Challenging business credibility    

With fewer resources and the need for some staffers to be specialists in topics such as payroll or benefits administration, learning or recruiting, fewer resources are available to act in broader strategic partnership with line leaders. As a result, some leaders view the small HR team as an administratively focused function, which can limit what HR is expected to contribute. While many HR roles can be strategic (for example, a learning professional conducting performance consulting or a recruiter providing workforce planning projections), they are often bogged down in day-to-day management of core processes.

So how can these challenges be addressed? 

1. Enhance strategic contributions  

Start by first assessing the impact of all existing HR processes and efforts on business priorities and needs. The more HR capabilities and activities directly drive business objectives, the clearer the prioritization picture becomes. A useful exercise is to assess the business criticality of key HR processes, practices, and capabilities in a 2X2 matrix that combines each one’s Impact on the business with its Difficulty/cost of implementation. For example:

Next, use the processes and practices that are low impact and/or difficult/costly to implement to identify opportunities to leverage process reengineering, lean methodologies, or design thinking to redesign lower-value processes and practices to make them less labor-intensive and more user-friendly. To support these redesign efforts, track employee and manager requests and inquiries, and use that information to create self-explanatory end-user tools and/or a referenceable FAQ knowledge portal. Further explore and test chatbots to handle questions and inquiries, which can help optimize support for a large set of standard employee and manager inquiries.  

Once you identify and address opportunities to reduce the need for high-volume administrative activities, consider realigning the existing team to focus on the highest-value strategic work, such as internal consulting and tailoring HR practices to the needs of critical workforce segments.

2. Manage with other resources 

Start by formally resetting expectations with management and employees about what can and will be delivered, and how strategic business requirements will be met while maintaining lower-value (but necessary) HR services (see Strategic Change Management guidance). Next, consider additional investments in manager skill building that, while avoiding adding HR work to their plates (an all-too-common and disliked occurrence), focus on leveraging HR’s expertise by developing managers' ability to handle basic and routine employee issues. That translates into process redesign (e.g., more frequent check-ins and feedback in performance management) and management development (e.g., identifying and handling wellness issues, advanced delegation-for-development skills, agile team management, etc.)

Further considerations that expand HR resources include outsourcing non-strategic processes such as payroll or benefits administration, HR and Safety compliance, and basic employee relations and legal claim management. Also consider partnering with local universities’ HR management programs to conduct HR projects, perform research, and offer internships for class credit.

3. Close skill gaps  

Core to understanding how to fill gaps in expertise is defining what type of support is needed – an extra “pair of hands,” expert, or collaborator (per Peter Block’s Flawless Consulting).  

A pair of hands refers to short-term, temporary, or part-time help that can often be found via an underutilized new hire or college hire in another department. Such roles can also be filled by temps, interns, or summer hires who do not require deep expertise.  

An expert with capabilities that do not exist on the team can be found by partnering with other functions and line organizations to produce strategic work on a project basis, such as the creation of an enhanced HR KPI dashboard (with IT or other existing analytics teams) or the redesign of an employee-facing process using design thinking (from the engineering or marketing function). External consultants can also be leveraged here.  

A collaborator can have team member(s) either work with internal or external experts, attend cross-training, send them to conferences to learn, or assign them as project leaders or team members on a project team with an outside consulting firm to learn firsthand. Again, external consultants can be valuable on such projects, and the collaboration can serve as a learning and development mechanism to build new capabilities and expertise within the existing team. 

Another key opportunity with positive long-term impact is reorganizing the HR team to develop expertise – with rotations to add specialized depth to HRBP’s (e.g., assign a functional specialty to develop expertise such as employee engagement) or specialists with another skill (assigning expatriate compensation to a compensation specialist) related to the needs of the business.  

In this case, offer advanced training for each staffer, then have each build a strategy, and finally develop programs to address relevant issues. Examples of tailored specialties that can meet current trends include employee mobility, career development, remote work policies, non-traditional compensation/rewards, coaching and mentoring, and employee listening, among others.

4. Build and enhance credibility

Expectations from business leaders can sometimes be lower, given the team's size and the scale of issues to be addressed. Counter this by emphasizing a business focus on everything – goals, strategies, practices, communications, and metrics/reporting. HR leaders should challenge their staff’s thinking with questions and collaborative thinking about business context, including translating business goals into HR objectives as a team.  

Attendance (and active participation) in internal client staff and business/operational and strategic planning meetings should be mandatory, as should the practice of coming back to the HR team with observations, trends, and questions from such meetings on a regular basis (e.g., in the next HR staff meeting). Finally, build a formal alignment with Finance, Marketing, Operations, and other functions by arranging regular HR staff briefings on new initiatives, goals, and results. A better-educated HR team is better prepared to contribute to the business as a true partner.

Final thoughts

Establishing HR as a key resource in the development and management of the business is a common goal, and one that can be achieved regardless of team size. Above all, a smaller HR team should focus on supporting the business and its primary objectives, while managing the administrative and process requirements that can become irritants or distractions when poorly run. Core to this is the role of the pioneering HR Leader, who is fearless, bold, and resourceful in addressing the various challenges faced while developing and guiding a cadre of HR resources that can deliver consistent value to the business.

Relevant Practices & Tools

Core HR Strategy Practices to Define a Foundational Direction for the HR Function. >

An HR Strategy sets business-based human resource (HR) tactics that will constitute a comprehensive multi-year approach to managing the HR function's structure... more »

Understanding Business Strategies to Align the HR Direction. >

Core to the development of an HR strategy is building an understanding of the key business strategies and initiatives that must be accomplished during the term of the plan... more »

Developing a Base Strategy that Provides Guidance on HR Direction, Initiatives, Objectives, and Goals. >

Developing a plan involves leveraging the outcomes of the various discovery activities, organizing them into a logical flow, and translating those insights into HR responses... more »

Conducting Performance Consulting-based Learning Needs Assessments for Specialized Solutions. >

“Performance Consulting” is the act of resolving workplace performance shortcomings by using a disciplined approach to learning needs assessments... more »

The Performance Consulting Assessment Tool: Uncover Workforce Challenges and Supporting Data for Learning and Development Solutions. >

The Performance Consulting Assessment Tool documents conversation(s) with functional managers who are facing specific workforce challenges that the learning & development team... more »