Human resources for small businesses is essential to its success, but there’s no hard and fast rule about creating an HR team.
Small business owners have a lot on their plate, from maintaining the quality of goods and services to keeping employees happy. An HR team, internal or outsourced, should relieve stress and reduce your to-do list, not add to it.
Keep in mind that HR employees come with a cost. The salaries of those workers need to be equal to the service they provide or their contributions to improve the business.
There are many options to be considered in terms of HR for small business owners. The following questions will help you decide when to hire an internal HR staff.
How Large is Your Company?
A large business often builds an entire HR department to fulfill its necessary functions. But small businesses don’t have those same needs, especially when their employees number less than 20.
But the number of employees is not the real problem, it’s time. Early on, owners typically select and meet new hires, and play a direct role in onboarding. As the organization grows, the time required to search for and approve a new employee increases.
Also, owners need to consider how competitive their industry is for talent. If it’s difficult to find the right candidates for a position, more and more time is consumed just by looking for valuable employees. That’s when human resources for small business helps.
Even with one or two employees dedicated to the task of hiring, this frees business owners to focus on what they need to do. If your time is unevenly spent in finding new workers, then an internal HR team is right for you.
Think of all that will be taken care of: finding a candidate, performing interviews, completing paperwork, maintaining records and managing payroll.
What Do Your Employees Need?
HR for small business owners extends to every business function.
Payroll, benefits programs, employee handbook and maintaining records are common tasks for the HR team to name a few. Both owners and employees need these items to be completed with precision. Otherwise, the costs could be greater than hiring an HR department.
Imprecise payroll results in tax penalties and affects employee salary—consistency in these two areas cannot be understated. Employees will be more likely to stay loyal to the company when they can trust their employer will pay them correctly and on time.
An internal HR team takes care of payroll according to an owner’s expectations.
On another note, human resources for small business are an excellent sounding board for morale. An HR team helps you create a benefits program that serves employees properly. Medical care, retirement accounts and employee culture encourage employees to stay on.
Trusting HR employees with this job removes more from your plate and provides peace of mind.
To Outsource or Not to Outsource
Outsourcing HR operations is something every business owner considers. A third-party can often take care of payroll functions quite easily and at a lower cost than an internal HR team.
But outsourcing is not always beneficial to your business. An outside company doesn’t have first-hand knowledge of company culture, nor do they understand what kind of new hires you need.
Also, if the outsourcing company is not in the same office, then owners don’t have direct access to people. When an HR problem arises, employees may not have an HR team accessible to solve their issues. The benefit of an HR employee is that employees can meet face-to-face for everything.
In-house human resources for small businesses gives owners more oversight and control. This is invaluable for problem-solving and sharing ideas.
As an owner, consider how dedicated staff helps you closely manage human resources to your expectations.
HR Serves the Business Owner
The question of when should you hire dedicated HR employees comes down to the business owner’s needs.
Do you need to free up time from employee-related tasks to run the business?
Is maintaining payroll becoming too much of a task? How can I ensure my employees are taken care of properly?
If an internal HR team helps business owners improve their business, then it’s time to consider hiring employees for the job. From saving time to employee oversight, owners have much to gain.
Explore Our Essential HR and Small Business Advice
From HR for small business owners to tips on small business startups, we have articles that answer your burning questions.
Come back to our site regularly for unique advice and ideas geared for small businesses.
