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Don’t have a big HR team” Don’t worry, here’s how to ‘do’ HR well on a limited budget

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The thing about effective HR management is that when it’s done well it largely goes undetected. Staff are generally content in their role with any issues resolved promptly. New staff are recruited and effectively inducted into the business. Employee absence is well managed, and welfare and benefit schemes operate smoothly.

But what if finances are tight or you need to cut back on the investment into your HR function” How do you operate an effective HR service on a shoestring without compromising on standards and opening yourself up to legal risk?

This is the challenge that faces many businesses, where it can be too easy to view HR as an additional expense rather than an essential strategic tool. But following a few basic guidelines will help you to deliver a professional HR service on even the tightest of budgets.

Get the basics right

The first thing to do is make sure you get the basics right as simple mistakes can prove extremely costly further down the line. Even simple areas like the right desk height is important. Make sure all staff have a contract and that you have appropriate policies and procedures in place.

If you are setting these up from scratch don’t buy expensive pre-written policies and documents as there are many good templates available free online. ACAS has a wide range of templates that are easy to use, which you can download and adapted to fit your business.

Use cost effective recruitment methods

Hiring new staff can be expensive, especially if you use agencies or advertise in publications. An advert in the national press can cost thousands but there are plenty of other ways to reach your target audience. On-line job sites, like Indeed, are widely used and are a suitable low-cost option for many roles.

“For more specialised positions you can use your own professional networks via LinkedIn or through any industry associations that you belong to, avoiding the need for costly head-hunters.”

Developing a streamlined recruitment process can also save you time and money. Undertaking an initial screening of candidates via a phone interview can help to reduce down your shortlist so that you only spend time interviewing those who are really suited to the role.

Invest in appropriate professional training

When you’re looking to control costs you may not be inclined to invest in staff development but ensuring that your HR team are fully competent is money well spent.

“Making procedural mistakes can cost you dearly if you ever find yourself in a tribunal, to ensure that appropriate staff attend regular employment law updates to remain up to speed.”

Many legal firms offer these to local companies, often at a very reasonable price. This way you can avoid the need to call on the services of a lawyer other than for very complex matters, helping to keep costs down.

Shop around for your employers’ liability insurance

Consider taking out tribunal insurance as part of your employer’s liability insurance policy. These policies are relatively low cost but provide you with legal advice and representation if you receive a tribunal claim.

Some policies will also only require you to pay the first £1000 of any compensation awarded by a tribunal, with your insurance paying the rest, potentially offering you a huge saving should you be unfortunate enough to lose a tribunal.

Absence management

Monitoring and controlling staff absence levels is a business essential but doesn’t need to be an expensive one. Occupational health services can charge over £300 for a single referral.

However, obtaining a report from the employee’s GP is far more cost effective and, if the right questions are asked, can be just as effective.

“Any requests for a report need to be detailed and specific on the advice needed as asking vague questions will get a vague response.”

Focus your questions on whether the employee is fit to return to their role, if there are any restrictions on what they can do and if you need to make any adjustments. This will then give you the information to make an informed decision on how to handle the situation.

Low-cost staff benefit schemes

Finding low-cost ways to reward staff can be a challenge but there are options in the market that HR teams can develop.

For example, on-line staff discount schemes can provide a real benefit to staff with minimal outlay to the organisation. Many providers of these schemes will allow you to brand the online portal so that staff associate the benefit directly with your company.


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