When Do Cannabis Companies Need to Hire HR? Here Are 8 Indicators

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Have you been wondering when a cannabis company might decide it needs to hire a human resources professional or department?

In an industry which already had such high costs – from application fees, legal fees, and banking – hiring an HR professional (or HR department depending on your company’s needs) might just sound like another huge expense. Everything that an HR department does is considered a cost because it costs money to hire. But not having a dedicated HR professional will end up costing you more money in the long run. Costs range from: 

  • Onboarding and training
  • Legal fees
  • Employee turnover
  • Loss of time
  • Payroll and benefits

When you hire an HR professional, you end up saving money because you’ll:

  • Avoid lawsuits
  • Retain happy employees that stick with you
  • Free up your time to work on the money-generating parts of your company
A group of happy employees at Ayr Wellness in Plymouth Meeting, PA. Photo credit: Ayr Wellness

Why now?

If you’re growing a cannabis team, you might have noticed the high volume of people who apply and want to find a job in the cannabis industry. And while this is a good “problem” to have… the influx of job applications can be exhaustingly overwhelming and disruptive for both companies and job seekers.

For cannabis companies, finding the right employee can feel like looking for a needle in a haystack. Sifting through hundreds of job applications. Trying to find the best employee for the position – and culture – takes time and energy. And that’s only before onboarding and training. FlowerHire X uses cutting-edge AI to find the best-matched candidate for the role for faster more efficient hiring. Learn more about FlowerHire X. 

For the cannabis job seeker, it can feel like they’re not receiving clear communication or respect for their job-hunting pursuits. In our startup industry, a lot of cannabis executives are wearing many different hats until the right team is in place. So for executives to also find time to give a prospective employee a proper onboarding experience, is a challenge at best. You could even let a potential unicorn employee slip by to your competition who already has an HR professional ready to give them the onboarding experience they’re expecting.

So if you’re a cannabis executive who’s been wondering if it’s time to hire an HR professional for your cannabis company, below are 8 signs that it’s time.

8 indicators that it’s time to hire an HR professional for your cannabis company

1 You’re spending too much of your time dealing with employee relations matters

  • Is dealing with employee matters taking up too much of your time? 
  • Are you worried that you’re not spending enough time on the parts of your business that actually generate revenue? 
  • Are your company roles becoming increasingly specialized?

If so, it’s time to hire an expert to offload HR work (6). It’s already costing you time that could be spent on bringing in revenue. And if you’re dealing with employee relations matters unsuccessfully, it could cost you more in legal fees – and reputation management – down the line.

For example, there are effective ways to off-board or fire employees that protect the employer from liability (1). If you’re letting someone go, it’s critical that you document it correctly. Or you could open yourself up to liability.

2 People are complaining about how they’re getting paid

Pay employees correctly. Employees getting paid correctly is extremely important for retention – and liability. Understanding hourly pay laws in each state can be confusing. So it’s critical to make sure it’s being done correctly.

Learn about Würk for cannabis payroll

Offer better benefits. Now that more cannabis companies are offering benefits, you must stay competitive to retain cannabis employees. But how? Where do you start? HR professionals create benefit plans that are both 

valuable to employees and fit the business.

The Glass House Brands team outside of their facilities in Santa Barbara, CA. Photo Credit: New Cannabis Ventures

3 You’re wondering how many employees should be in your company before you need HR

If you’ve grown to about 25-30 full-time employees – and plan to grow more – you’re making a wise investment to hire an HR professional for your cannabis business. 

If you have 15-20 people, you can get away with fractional HR. But as you start gaining employees, they need somebody to turn to – other than executives – when a problem arises. And a specialized person to be proactive about avoiding HR problems. Keep the executives focused on what they should be doing.

Reach out to FlowerHire to hire an HR professional

Reach out to BlueFire Cannabis for fractional HR

4 You’re wondering what an employer can do to avert employees from wanting to seek unionization.

Employees seek unionization when they’re dissatisfied with how management addresses employees’ concerns. But a company that addresses employees’ concerns – and fosters healthy relationships between employees and management – is less likely to force employees to union representation.

An HR professional can help legally avert unionization by implementing strategies like (2):

  • Open-door management policies
  • Competitive benefits and pay
  • Employee trust and recognition
  • Consistent and fair policies and practices

5 Retention and turnover is costing you too much money

Are you one of the cannabis companies experiencing a high turnover rate? While HR professionals wear many hats, one of their core functions is employee retention (3). HR professionals help build a cannabis employee retention strategy and implement it. HR professionals will help with

  • Recruiting and interviewing
  • Employee training and development
  • Employee motivation
  • Improving workplace policies
  • Fostering the company culture
  • Structuring benefits and compensation

6 You’re experiencing ongoing difficulties hiring the right people.

An HR professional is someone who is dedicated to building and scaling the company culture and employer brand.

Before you can hire the right people who will fit with your company, you must define your company culture. Company culture goes beyond what goes on in offices and the types of employee events that occur… Company culture starts with how employees interact with each other – from the highest-level executives to the hourly employees (5).  And human resources departments, directly and indirectly, impact how company culture operates.

HR professionals help develop a strong “employer brand” – public perceptions of company integrity and the way company acts on its values in the workplace –  to naturally attract and retain the right talent. An employer brand communicates that your company is a good place to work. And existing employees find a deep sense of loyalty to an organization when there is a strong employer brand (4).

HR’s implementation of rules and regulations guides employees to behave and interact in certain ways. The initial interactions with HR establish an understanding of how all interpersonal interactions and discussions are conducted.

7 You realize that you could have a better onboarding process to support employees becoming successful more quickly

The HR person is the first person an employee talks to: 

  • Before they start at a company
  • During the interview process
  • After they are actually hired

The HR person is the first impression your company has on a new employee. That person is key. They set the stage for the employee’s future at the company. The first impression a new employee has with a potential employer could make or break their decision to work at the company.

An HR professional develops efficient onboarding systems and processes that are effective and save time. They’re dedicated to getting new employees up to speed faster – ultimately saving time and money.

8 You’re not sure how to offboard or fire someone without risk

When it’s time to offboard, terminate, or fire someone, liability can become a problem if the offboard is not diligently handled. HR professionals help minimize liability related to allegations of unfair employment practices. They identify potential risks, investigate how to resolve, and take action on resolving workplace issues. Workplace issues that are left unattended could get the company pitted into state and federal legal matters.

When do cannabis companies need to hire HR? 

If you said, “yes, that’s my company” to any of the above indicators, then it’s time to think about hiring a full-time HR professional. Yes, this is a big expense. But keep in mind the long-term savings, peace of mind, and growth opportunities that come with hiring an HR professional.

Sometimes hiring an in-house HR person is what’s best for your team. We’re here to support you through the transition and beyond. Reach out to the FlowerHire cannabis recruiters when you’re ready. And we’ll support you in finding an HR professional that helps:

  • Cultivate and scale your company culture
  • Attract and retain the right employees
  • Develop compensation and benefits plans
  • Efficiently onboard and train employees
  • Develop systems and processes that reduce liability
  • Prevent employees from feeling the need to seek unionization

 

Resources

  1. https://hronboard.me/blog/employee-offboarding/ 
  2. https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/preventunionorganization.aspx 
  3. https://rmi-solutions.com/hrs-role-in-employee-retention/ 
  4. https://www.edsisolutions.com/blog/why-employer-branding-is-critical-for-attracting-and-retaining-talent 
  5. https://www.forbes.com/sites/forbeshumanresourcescouncil/2020/09/21/13-ways-hr-can-help-build-a-sustainable-company-culture/?sh=4ad2f3a63a33 
  6. https://www.businessnewsdaily.com/11158-hire-full-time-human-resources-employee.html 

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