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Photo: Drobot Dean, YFS Magazine, Adobe Stock

Four HR Terms Every Entrepreneur Should Know

Learn these key HR terms for your business and workforce so you know how to move forward when managing teams.


We all know that human resources (HR) are a critical part of effective business operations, whether we have a small or large team. To achieve the big goals we set for our organizations, we need effective, committed employees who will help us make things happen. Yet, we won’t get the most out of people if they’re not encouraged, valued, and otherwise well looked after.

As a leader, it’s your responsibility to either handle HR tasks or outsource them, whether to in-house workers or external specialists. Regardless of who handles the job, though, you need to know what some of the most common terms are that relate to human resources.

 

Exit Interview

Few managers have conversations with people before they leave an organization. They fail to ask what they liked and struggled with while working within it. An exit interview is a term used for this discussion. The idea is for leaders to learn more about someone’s reasons for leaving a business and understand more about how they found their experiences with the company while working there.

These interviews are vital for numerous reasons. In particular, they provide business owners, department heads, human resources leaders, and others the chance to learn insightful details about what’s currently good and bad in the corporate culture. Plus, they’re an excellent way for exiting employees to have a chance to have their say.

 

Employee Retention

However, you won’t need so many of these exit interviews if you work hard to retain your workforce for as long as possible. Employee retention refers to the idea of keeping valued staff members working for the business. The lower your employee turnover (another term worth knowing, which means how often you lose employees), the more able you are to keep skilled, productive, trained workers on staff.

You want to boost employee retention as much as possible, so you don’t lose team members too often. Finding, training, setting new employees up in your systems, and integrating them into your workforce takes time, money, and energy. If you don’t have to do this as often, you’ll improve company results and reduce stress for you and other leaders. Plus, remember that other team members often don’t have high morale if their colleagues keep leaving, so increased continuity leads to improved motivation and company culture.

You can encourage people to stay working for your organization by regularly thanking them for their efforts, in-person or publicly, and handing out awards every so often. Also, reward people with gifts, bonuses, and perks (e.g., free lunches or massages or extra days off work) and give people opportunities to grow and develop within the business so they’re less likely to get frustrated or bored and leave. Don’t stress about handling all of these tasks if you feel overwhelmed by the thought, though. Service-based HR firms such as Workhuman can tackle such jobs for you as needed.

 

Outplacement

Another area of human resources you might want to hire an external business to do for you is outplacement. This word is used for services that help laid-off workers find new roles. If your organization is going through workforce changes and business restructuring, you may want to ease the news about people being let go by offering to aid them in transitioning into new careers or jobs.

Outplacement includes various services such as career strategy and planning sessions, help with writing and editing job application documents, and interview coaching. It can also cover networking assistance and contract negotiations, among other things. Providing this support makes exiting employees less bitter and less likely to strike out at the business. In addition, employees who remain with the firm will see that the business is supportive of its workers and does its best to do right by them. This should improve morale, which is essential during restructuring periods.

 

Performance Review

Providing employees with regular feedback about their work and examining what they’re doing well and where they can improve is a vital part of HR and something all businesses should do. A performance review is a specific type of feedback session typically completed annually, sometimes twice a year, or even quarterly. It involves workers and their managers sitting down for a meeting where leaders evaluate and document job performance over the previous year or months.

In addition to highlighting areas where staff members have excelled and those where they need to up their game, these reviews provide an excellent opportunity for employees to bring up any concerns they have. They might want to talk about their role, team, where they’d like to go in the company, and how their managers might be able to support them to do this. It’s a chance to set concrete, measurable goals for staff to work towards.

These are some of the key HR terms you need to know, but there are plenty more. Learn what you can about all the relevant terms for your business and workforce so you know how to move forward when managing teams and getting the best possible results out of them.

 

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Photo: Drobot Dean, YFS Magazine, Adobe Stock
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