URL: http://www.entrepreneur.com/magazine/entrepreneur/2006/august/160222.html

When Israela Brill-Cass couldn't decide whether or how to let a troublesome employee go, the attorney and executive director of Boston Law Collaborative LLC called in Dina Beach Lynch. Acting as an ombuds, Beach Lynch helped the 10-person Boston firm navigate the process in a way that left everyone as satisfied as possible.

"It was a very difficult time for us," says Brill-Cass, 37. "But with a lot of guidance and support from Dina, we realized that the good of the group was at stake."

An ombuds--the shortened, currently favored version of ombudsman--is a neutral person who helps companies solve HR problems and reach business goals. The concept dates back centuries and has long been a fixture in academia, government and some large companies. The value of having a person to whom employees can confidentially bring their questions and concerns has been proven in many organizations. Nowadays, ombuds appear in entrepreneurial companies, where their benefits get tested on a smaller stage.

At SMBs, ombuds act as external HR experts. When employees have someone to talk to confidentially, ombuds proponents say, workers more readily report theft, misuse of company assets, harassment and other issues. As impartial observers not aligned with management or employees, ombuds can suggest solutions that advance the goals of the entire company. The tales employees tell ombuds take the tempera-ture of morale and can help evaluate other concerns. Finally, Beach Lynch says, having an ombuds can lower the cost of employee liability insurance.

Unlike HR professionals such as ethics officers and compliance officers, ombuds aren't there to enforce company policy, and they don't have to tell management what they hear. And unlike the confidential telephone hotlines some companies use to encourage employee feedback, ombuds do more than listen. They can explore options, make referrals, recommend solutions and suggest policy changes. "You have an early warning system and someone who can help an employee get things resolved without liti-gation," says Beach Lynch, CEO of Ombuds Academy in Boston.

You can use an internal person or hire an outsider to be an ombuds. A recently retired, well-respected longtime employee often works well, or you can employ a part-time ombuds or retain someone just when needed.

Outsiders may be better trained in mediation, investigating and other skills, plus they provide a helpful external perspective. At the same time, outsiders don't know as much about the company, notes Randy Williams, a former ombuds whose Morristown, New Jersey, company, Redmond, Wil-liams & Associates LLC, helps companies design ombuds programs.

Ombuds also aren't for all companies. They can be expensive: Beach Lynch charges anywhere from $1,500 per month as a retainer to $50,000 for a six-month assignment. And, she adds, ombuds often fit poorly into strongly hierarchical, tightly regulated companies where employees are expected to follow orders without question.

Brill-Cass says having an ombuds has been well worth the investment because the firm runs more smoothly and she can devote her attention to areas where she has more expertise. "When bumps in the road come up within the firm," she says, "it's wonderful to have somebody who knows us and what our goal is, yet is on the periphery and is not personally involved."