Some specialists advocate that small companies rely on part-time consuItants rather than on professionals.Says Peter Grimm, a partner in Nordeman Grimm Inc. a New York management recruitment firm: "Really good personnel guys cost $150,000 to $200,000." He says, "The company that isn't able to afford to pay a personnel director $75,000 to $100,000, is probably better off relying on a consuItant" who will work part-time to prepare personnel manuals, advising on recruitment and training, and evaluating how well employees are being managed. The consultant can organize clerks within the company for such personnel functions as benefits administration.
Advanced Instruments Inc., a Needham Heights, Mass., maker of medical diagnostic equipment, has taken that route. In the late '70s, with about 90 employees, president Romano J. Micciche hired Springfield, Pa.-based M. J. Carroll Co. For a monthly rate of $1,025, Carroll provides experienced personnel professionals for at least half a day a week to small companies. Micciche says everyone in the company likes the arrangement -- even managers whose freedom is limited by the policy manuals prepared by Carroll consultants. "Surprisingly enough, even our managers are happy to have all these things spelled out. They don't have to guess anymore, " says Micciche. Other companies use moonlighting professors of human resources or industry specialists as their personnel consuItants.
Not all companies need to rely exclusively on consultants and clerks until they can hire someone full-time, however.Alternatives include:
* Hiring an untrained personnel director. Consultant Ballew suggests that many times small companies want "a schoolteacher who will keep the records and do the routine things and function as an ombudsman for the employees. A retired teacher often also "knows which families in the community have created problems for companies in the past," Ballew says. Such people can be hired for $18,000 to $25,000 and are often adequate for companies that aren't expecting rapid growth.
* Hiring an inexperienced professional or promoting someone from within to administer benefits, sort out conflicts of policy, and run some training programs Such people can be employed for $25,000 to $35,000. But as Shopsmith found, they have limitations. "You always hope that the person you put in as personnel manager can develop into a true human resources manager, but it doesn't usually work out that way," says Folkerth. "You can't train that person because you don't know what he or she is supposed to do."
* Hiring a professional with limited experience but an ability to grow. The person shouldhave demonstrated competence by holding a variety of increasingly important personnel jobs in a larger company and probably also by obtaining significant academic qualifications. Several consultants suggest that such individuals can be hired for $40,000 to $45,000.
Professor Michael Beer of the Graduate School of Business Administration at Harvard University suggests that any campany that hpes to grow and that lacks a capable human resources manager should consider a "personnel audit" once a year. An outsider should interview all key staff and a random sample of lower-ranking staff. "So often I find people as managers who just don't have the skills to do their jobs," Beer says. "And nobody recognizes that they need the skills. Then the company gets into trouble and there's nothing that can be done. You can't develop those skills overnight."
The important point is that no entrepreneur should neglect the tasks that a good human resources manager performs just because they are less pressing than the challenges of marketing and product development. Many entrepreneurs can manage well by instinct when they employ only a few people, but many employ ees can't effectively communicate their problems, achievements, and needs even to a highly capable boss when they no longer see him every day.
Folkerth notes that an entrepreneur typically hires a personnel manager when he becomes "tired of all sorts of petty details" such as whether to permit a sick-day excuse for certain unusual conditions. Often, however, companies pay a heavy price for waiting until personnel management is an obvious burden. I nothing else, regularly evaluating the company's relations with its people is vital for preventing lawsuits and employee unrest.
Anti-discrimination laws, for example, apply to most businesses with more than 15 employees, and few company presidents can evaluate every hiring or firing by one of their supervisors to make sure no laws were broken. Professor George Odiorne of the University of Massachusetts at Amherst notes that rules against age discrimination, which were strengthened in 1978, are especially poorly understood by most managers outside of personnel. Employees over the age of 45 are now heavily protected. "In this recession there's been a lot of unloading of deadwood over 45. People don't realize that they can't do that anymore," Odiorne notes. "There's a guy suing a major department store for $1.7 million, and he's going to win."
Too many businesses first think about hiring a personnel manager, Odiorne comments with a sad laugh, "the day the subpoena arrives."
