Family Business HR – Human Resources, or Human Relations?

When people cite statistics about family businesses, they often talk about how many such businesses exist, what percentage of GDP they produce, and how many people they employ. That’s a lot of human resources.

Most of these businesses, however, are actually quite small, so very few of them have a human resources, or “HR” department. Some companies, when they get big enough, will get to the point where they actually hire someone for the role of specifically looking after employee issues.

In my father’s company, we were well on our way to 200 employees before he decided that it was time to hire a “personnel manager”, as the position was often called back in the 80’s.

His job was to look after labour negotiations with the union, as well as benefits, hiring, grievances, and eventually an employee assistance program. The greatest relief in this hiring was experienced by our CFO, because before that, all this stuff was just considered “admin”, and was therefore under his responsibility, by default.

Lately I have been noticing that many people are throwing around the term “HR” more and more. Working in Montreal, I spend lots of time dealing in both French and English, and for some reason I feel like I hear the term (“RH” – resources humaines) quite often.

It could be my imagination, but it feels like it has come to take on a meaning that is broader than the sense of employee work issues. And maybe that’s not a bad thing, because I think it lends itself quite well to my new interpretation.

It is nice that we actually consider people to be a resource, you know, something to be valued and the supply of which you need to spend time and money acquiring and developing. But “resource” also feels pretty impersonal, more like a thing than a living, breathing, feeling person.

So when someone says something like “I don’t like to get into all that HR stuff”, or “our company has been having lots of HR problems”, I like to think about it as if they are issues about Human Relations instead.

There are very few jobs in any company where you don’t need to worry about relations with other humans. We all do it, and we could all do it better too.

You can have one personnel manager whose job it is to deal with major employee issues, but you can’t have just one person in any company worrying about human relations.

Of course like most stuff surrounding the way things work in a business, everything starts at the top and works its way down. The way the owners treat their hired employees becomes a huge part of the culture, and good culture beats great structure.

In a family business, as usual, things are a bit trickier. Do you treat your VP like your VP, or like your daughter? Do people with the same last name as the boss get treated better than others, or worse?

How about the relationships with family members at work versus relations with those same people outside of work? Should they be the same, or should they be different?

There are no standard right or wrong answers, but there are plenty of things to think about and talk about. In smaller companies, everyone knows everyone else, which can be good or bad. As the business grows, it gets harder to know everyone, but communications from top to bottom become even more important.

Culture and communications, and developing good employee working relationships, are not just things that matter in large organisations. They can be even more important in smaller companies, and in family businesses, they can be a key factor in the success of the business and the family.

And you cannot just delegate this stuff to the HR department and the personnel manager.