4 HR “Keys” In The Expanding Cannabis Industry

4 Keys to Expanding HR in a Small Cannabis Company

When small cannabis businesses navigate a growth spurt, their Human Resources (or HR) practitioners have an opportunity to demonstrate exactly how they can contribute to the business. For instance, they can influence and take responsibility for many aspects of talent acquisition, compensation planning and workforce management that had been the domain of hiring managers.

But doing so means creating and executing on a daunting to-do list, say HR professionals who have been in this situation. And their work is often complicated by the cannabis industry’s unique challenges, so formalizing and expanding HR often takes place in an unsettled landscape.

In some cases, “expanding HR” means assigning one (1) person to handle all the responsibilities related to recruiting and managing the workforce. In others, it means asking an administrator who’s been splitting time between employment issues and other work to focus exclusively on HR.

In still other cases, it means doing whatever it takes to ensure HR policies are consistent, adhered to and compliant. Growing HR meant consolidating responsibilities that had been handled by other managers to others it means expanding recruiting activities and streamlining a range of processes that had been inadequately addressed in the past.

Whatever the specifics, common themes emerge whenever a small cannabis business grows, and management realizes it’s time to get serious about HR. Practitioners say leadership’s key considerations should be:

  • Recognizing when HR’s responsibilities should be formalized or expanded.
  • Identifying and plugging gaps in the organization’s current approach to HR.
  • Opening and maintaining effective lines of communication with both managers and employees.
  • And, of course, ensuring that everything is done in compliance in the cannabis industry with applicable employment laws and regulations.

Essentially, when a cannabis company is very small, you can just holler across the room if you have someone you want to deal with on an issue. But when you grow fast and you have a lot of people who are fresh faces – number one, they don’t even recognize you, and number two, you really need to reel things in and hold them more tightly.


Signs You Need to Expand Your HR Department

The first challenge is recognizing when HR needs to grow and become more formalized. Some symptoms of those needs, such as falling out of compliance in the cannabis industry, may be obvious to anyone who knows something about HR. But other issues may be subtle.

For example, drop-in employee morale and motivation may become apparent when a company is growing rapidly. As workloads increase, cannabis industry workers become stressed and overwhelmed. That is probably the first thing noticed, even high performers who are normally happy will begin showing signs of stress.

Also, there is the possibility of more errors being made throughout the company. These included mistakes in order entry, products shipped without adequate packaging and an increase in quality-control issues. If you’re following your data – and you want to trend all of this and monitor it monthly – you can quickly see a change.

Gaps in basic HR processes is another indication the department should grow when new workers aren’t being welcomed or properly oriented. It is critical, as you are trying to recruit people and retain people. That’s where you need to dive in to say, ‘You know, we really need to get this organized so that when someone shows up on their first day, it looks like we know what we’re doing.’

One sign may be right in front of you: Is HR bogged down? Most of the time it’s simply going to be a product of workflow and especially if there are some red-light issues like complaints coming in – those are warning signs.


Writing Your New Playbook

Once cannabis industry executives decide to expand HR’s work, it’s time to take stock of how different responsibilities are handled and by whom. An early step is to evaluate with other managers how processes such as onboarding and offboarding were handled. Where necessary, modify the organization’s employee handbook, personnel files, benefits administration, and internal communications.

In many cannabis companies, there is not a designated HR person or department. The functions that would typically fall within an HR department or be handled by HR personnel were split between current staff members. However, as the cannabis industry grows, so does the need for employees to focus on their core responsibilities – in this case, “being in compliance in the cannabis industry.”

Although planning the changes to HR is a team effort, the first order of business was to evaluate how tasks, processes, and procedures were being addressed and then determine which needed to be somehow transitioned.

The cannabis industry needs to recognize the need for effective internal communications. Because many people are uncomfortable with change and need clear communication regarding new processes, who are handling what and keeping everyone looped in is critical.


Cannabis Industry Information Sharing

However, communication isn’t about sending out a single message and moving on since different people digest messages in different ways. So creating a cannabis business communications plan that ensures you’ll reach everyone is important.

Typically, e-mail was usually enough to keep the office staff up to date because the employees had regular contact with HR. But sometimes HR needs to give presentations to employees in the cannabis company’s other locations and make telephone calls to workers who spent most of their time in the field.

You can’t just send an e-mail and pray every one reads it, to be an effective HR person, you must understand your audience. Communication is about more than keeping people informed, it’s also about listening. For one thing, listening will help your own efforts.

If the HR department is experiencing pressure to grow, then most of your peers likely are as well. Probably, you have a few allies in your cannabis organization who are going through the same thing, and when you can collaborate on what your efforts are and what’s needed, it’s usually a much more powerful result.

Clear communication also helps educate employees about who they should turn to for help with benefits, payroll, and other issues. Once a cannabis company has an HR officer, then people will know that when an e-mail comes from them, it was going to be about benefits or policies.

In an environment where different cannabis industry workforce issues were once handled by different staff or managers, providing that kind of clarity smoothed the transition.


Cannabis Compliance, of Course

Small businesses, for whatever reason, may from time to time fall out of compliance with cannabis industry regulations, employment laws and regulations. For companies that don’t grow HR along with their business, the courtroom is the danger and you need to always look at every situation as ‘How is this going to look in court?

Practitioners encourage HR professionals to apply policies consistently and follow up on out-of-scope events quickly. If an employee or manager sends an inappropriate e-mail or takes actions that run against company policy, then address the situation right away.

Sometimes managers might lobby for a policy exception for an employee. Now you’re going to set a scary precedent. Implementing and enforcing consistent policies was essential as the cannabis industry grows companies HR.

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