Mention HR to people and you might get a blank stare or even an eye-roll. Small business owners are no different. Some may not have an understanding of how HR can help improve their businesses. This article outlines tips and tools for small businesses looking to start or revamp their HR department.
If you have used any of the following reasons to not create an Human Resources department, you may want to reconsider:
My business is too small
No business, regardless of size, can escape the need for proper HR programs. The owner may work closely with the employees and think that HR is unneeded, but that simply is not the truth.
Proper HR functions are necessary to open communication lines between the employer and employee and provide a clear understanding of what is expected of management and employees.
It costs too much
It’s true a marketing director can demand upwards of $54,000 per year, a cost no small business wants or can afford.
But there are less expensive tools allowing the small business the same advantages of having an HR department.
It’s too time-consuming
Compared to what? Small businesses have many necessary HR functions that must be performed…payroll tax compliance, workman’s comp requirements and benefits, employee files and records, and many other activities.
The Responsibilities of Human Resources
Recruiting, hiring, firing, and managing employees is a crucial part of any business. Employees can be an asset of the business, but only if they are managed in a way that is advantageous to both parties.
A good HR program will allow the business owner to:
- Recognise employee talents and place them in a position that benefits the business and the employee. Employee review surveys, conducted on a regular basis, gives the small business owner a better understanding of the relationship;
- Recognse the wages and benefits the employee is receiving and whether they are justly compensated. Solid data will alleviate the employee’s feelings of being underpaid.
- Recognise the value of communication between management and the employee. Communication can be a two-way street, giving both parties a window of what is needed and expected.
Interviewing and hiring potential employees
The interviewing and hiring process, trying to find the right person to fill a job, can be tedious and complicated. There are resources available to the small business.
There are federal and state guidelines on what is the proper way of conducting interviews. These regulations assure that certain subjects are not broached in the interview and that every applicant is given a fair chance at receiving a job offer. Any type of discrimination is not allowed.
Defined HR practices and implementation are the means of conducting proper interviews and protecting the company and the applicant. Any straying from these practices will cause trouble for the company.
Employee conflicts and their resolutions
Pro tip from real estate expert, Sacha Ferrandi, “There are HR programs that will help you create an employee manual. Once the manual is read and signed by the employee there is clear communication of what is and is not allowed between employees”.
Clear policies and regulations define the action the employees and management must take to resolve issues.
Payroll, paid time off, vacation time, and sick pay
Certain promises are made to employees when they are hired, including payment of wages, proper withholding of their taxes, the matching of their social security and Medicare payments, and providing unemployment insurance in case of a lay-off. The lapse of any of these promises will spell the doom of a business.
The IRS and state agencies are going to make sure these promises are kept. Consequently, there are numerous reports and forms that must be filed timely and correctly. HR practices remind the business owner of what needs to take place.
Another area that needs constant attention is paid time off (PTO), vacation time, sick leave, etc. A good program will alert the employer and the employee to policies and the available times for each of these situations.
HR keeps the company and team together
There is a commonality when two different teams, management, and employees, have a clear understanding of what is expected.
Each side receives important messages of what is expected of them as well as the other team. HR can help improve interdepartmental communication.
Preventing small incidents from becoming large problems
The handling of problems on a consistent basis is what keeps them from becoming big problems.
HR resources provide a clear-cut definition of how grievances and problems are to be eliminated before they become overwhelming.
Establishing communication between your business and your employees
Wesley Ward, Marketing Manager of an online faucet supplier reminds us, “A good HR program creates a communication highway allowing both management and the employees to participate in company growth and employee goodwill.
Employees often feel left in the dark about how and why the company exists. Communication is a means to alleviate this problem.”
Both teams have a clear understanding of goals and expectations, allowing them to contribute to the success of the other.
Increased communication leads to increased production, higher profits, and higher wages.
Implementing an affordable HR practice
There are ways a small business can create good HR practices:
- HR can be outsourced to PEOs. The company is then relieved of all responsibilities regarding hiring, firing, and management of employees.
- Online services can be used.
- Software is available as a download to your computer, or available as a source in the “cloud”.
Technology is evolving and making things more efficient in every aspect of the workplace
The advantages of software over other sources of HR programs are:
- HR software frees time to do other things for your business;
- Multiple copies of the same document and cross-referencing are not needed. This task is completed by the software.
- Both management and employees have access to authorised aspects of the program, keeping communication clear and up to date.
- HR processing is faster. No more manually preparing, filing, and distributing HR documents. It frees management from mundane tasks. HR functions are instantly available.
In conclusion, it is worthwhile to explore why implementing HR practices benefit your business and how you can afford to do so despite the size of your business.
About the Author
Karina Mojica is a contributor editor for 365 Business Tips. From sunny Los Angeles; California State University Dominguez Hills she made her way back home to beautiful San Diego. She has a degree in Marketing, with experience in PR, and social media marketing.