5 reasons your small business needs HR
Human Resources is defined as “the department of a business or organization that deals with the hiring, administration, and training of personnel.” Does your small business need HR? If you have employees, it’s definitely a good idea to consider.
If you’re wondering when the right time to hire an HR professional might be, the answer is really at the point when you hire your first employee. As you begin to build your workforce, you could delegate various HR functions to some of your team. However, having a dedicated person in charge of HR is best. Human resources managers are proficient in multitasking, juggling the everyday needs of your staff.
Once you’ve filled the positions for your small business, you need to take a moment to think about what your employees need most. The list can grow relatively quick, and you’ll understand the necessity for a human resources manager. We’ve highlighted the top five reasons why your small business needs HR.
1. Processing payroll
Of course, your workers show up each day because they love what they do, but at the same time, they like the idea of getting paid for their time. HR manages the systems put in place to regulate a timely payroll process. For example, setting the parameters for tax withholdings, entering each employee's details, and ensuring W-2 and 1099 forms are sent out when appropriate. This task alone can be a major headache if you’re not familiar with payroll details. HR managers do the heavy lifting here, allowing you to focus on other areas of your business.
2. Benefits and wellness
Similar to payroll, benefits are kind of a big deal to your staff. Depending on how big or small your benefits package is, this task can be time-consuming.
A human resources manager is well equipped to handle open enrollment each year for medical benefits for all eligible employees, in addition to ad-hoc requests for new hires when they become eligible. They manage the administrative efforts by adding all details to the appropriate systems and coordinating all benefits and applicable benefits managers from insurance companies and investment firms for any retirement plans. In addition, they stay abreast of any government regulations regarding savings plans and how those plans are taxed – or not.
Do you offer wellness programs to your employees? Your Human Resources manager is the one making these programs happen. Providing your staff with all they need to keep their minds and bodies healthy.
These HR superstars take care of all this and present it to your staff in a digestible and easy-to-understand way, fielding any questions and putting minds at ease.
3. Hiring and firing
Have a job opening? That’s right, your HR manager will know exactly where to go to list the job to attract the best fit. They are typically the first point of contact a potential candidate will have as they are vetted for the open position. Once interview(s) are complete, a human resources person would usually be the one to contact the selected candidate to extend an offer and advise any other candidates that the position has been filled.
On the flip side, when an employee needs to be terminated, this falls to the hands of human resources, too. Managing the employee's termination is a big task, as the termination circumstances could have various effects. For example, there could be severance packages to put together, PTO time to be paid out, termination of benefits, and coordination of COBRA (Consolidated Omnibus Budget Reconciliation Act) health insurance continuation coverage.
Aside from the administrative efforts surrounding the termination of an employee, the HR manager also serves as the face of the business, being discreet and respectful of the employee and mitigating any hostile situations that could arise. Not a job just anyone could handle.
Forbes highlighted four of the most common HR mistakes a small business owner could make – two out of the four involve hiring and firing. Employing a solid HR manager can help your small business avoid any potential mistakes in these areas.
Related: 5 Common Small Business HR Mistakes
4. Onboarding, training, and development
Once you’ve hired new talent, they need to learn the ropes. The HR department is a fountain of knowledge for new hires. It’s where they’ll learn the company's history, learn the rules of conduct, hear about all the exciting benefits the business offers, and even get workplace access cards and codes, if applicable.
For seasoned staff, HR works tirelessly, setting up training and seminars. They look for opportunities to benefit all employees and help them grow – both in the company and as individuals. Training and development are ways that show your staff you are genuinely invested in them and want to see them succeed, really helping them embrace their full potential.
5. Workplace conduct, safety, and regulatory compliance
Depending on the industry you’re operating in, chances are there is a list of safety precautions to follow – not just of your own assigning, but things the government designates as safety regulations. In addition to these regulations, you also have your business code of conduct, how you expect your employees to behave and present themselves to their colleagues and customers.
The Human Resources manager is the one who oversees compliance with safety protocols and enforces your code of conduct. They’re the first to be contacted if an employee is found not following the rules, and it’s up to them to course-correct the offending party.
Can HR be outsourced for my business?
For small businesses with minimal staff, there are options available to outsource many of the responsibilities that fall under human resources. Rather than take on the cost of an additional employee, this is a viable alternative. As your business grows and you expand, you can always revisit the idea of bringing an HR manager in-house. But if you’re a micro business, outsourcing your HR efforts is probably the most economical choice for you.
Human Resources can be beneficial for your small business. Imagine trying to run your day-to-day business operations while also putting an ad out to hire new staff, suddenly remembering it’s a pay week, and receiving a note from the labor department that you’ve broken a labor law. A tremendous amount of things to handle all while growing your business.
The job of an HR professional is not always fun or easy; however, there are dedicated HR managers out there that welcome the challenge and rise to the occasion.