Two forms of human resources: • Internal Human Resources • External Human Resources
Internal Human Resources • There are three keys to internal human resources: • Finding and keeping good employees • Choosing the best person for the job • Building employee loyalty
Finding and Keeping Good Employees • It’s easy to find people to work for you. It’s not easy to find the right people. • To find the right people you need to plan your recruiting and selection process in detail. • Your job advertisements must be noticed by the people with the right qualifications and interests. You need to interview and screen these candidates carefully.
Finding and Keeping Good Employees • Two ways to find good employees: • External recruitment: These are people from outside your venture. • Internal recruitment: These people may already work for you in a different capacity.
Choosing the Best Person for the Job • Spend time making sure candidates resumes meet your minimum qualifications. • Call references. • Interview the person so you can test their knowledge and skills in a way that helps you to get to know the candidate.
Choosing the Best Person for the Job • Once hired, give the employee a thorough training and orientation session. • Training sessions can be expensive and time consuming, but if done properly can prevent errors that could seriously harm your harm.
Building Employee Loyalty • Rules for keeping good employees: • Treat employees with respect • Value their ideas • Ask for their opinions • Be honest about future growth and opportunities • Clearly communicate policies and expectations • Be flexible • Encourage employees to upgrade their skills. • Offer pay incentives
Building Employee Loyalty • Kinds of Pay Incentives • Gain sharing: Workers share a percentage of the revenues. • Profit sharing: If the venture makes a profit, a portion is shared with the employees. • Group incentives: Targets are set and awards are given when they are met. • Individual incentives: Workers are given awards when they meet individual productivity targets. • Pay for knowledge: Employees get paid more as their acquire new skills and knowledge
External Human Resources • The external human resources is made up of people outside the organization. • Lawyers • Bankers • Accountants • Real Estate Agents • Insurance Agents • Managements Consultants • Successful entrepreneurs use these people in effective ways.
External Human Resources • Lawyers • Lawyers offer advice on: • choosing the best type of ownership, registering a name, and finding out about applicable local, provincial, and federal laws. • Bankers • The lend money and provide financial advice. • Accountants • Helps keep track of the finances as the venture grows and expands. • An accountant should be hired early on in the venture process.
External Human Resources • Real Estate Agent • If you operate from a bricks and mortar location a real estate agent is key to success. • They help you find the type of location your business requires and they will negotiate either the sale or lease of this property.
External Human Resources • Insurance Agent • Help you obtain fire, flood, and theft insurance. • Business interruption without insurance can cause a business to fail. • Management Consultant • They help entrepreneurs in every aspect of the business. • They are essential at the start-up phase of a venture.