Does your Small Business Need Human Resources?

When a company should hire someone to manage HR isn’t always evident. Should your second employee be in charge of insurance and onboarding for your first team member? Is 50 employees the magic number for hiring a full-time HR person?

If there was a clear answer, this wouldn’t be a question so many small businesses face.

Is it necessary for a small corporation to have human resources? It most likely begins with how you define “small business.” Any company with 1-6 employees is a micro business, according to the United States Small Business Administration. Do you have a pressing need to hire a human resources business partner if you’ve recruited your brother and neighbor and are classified as a micro-SMB? Definitely not.

Why are HR practices in small businesses different from those in large corporations? Within a tiny organization, human resources specialists may be viewed as “a mile broad and an inch deep.” Don’t worry, HR professionals at tiny businesses, that was not meant to be insulting. It simply means that they are in charge of everything that has to do with people. They’ll almost certainly assist with hiring, onboarding, discipline, and performance difficulties. Furthermore, they are likely to assist in the management of the front desk, work parties, and some of the softer aspects of the office. In essence, you can expect to be an HR Team of One for a small company.

What is a Good HR Team Structure for a Small Business? In a small business, organizational structure isn’t as crucial as it once was, yet who HR reports to may be the most important factor. If the position does not report to a senior leader or is not part of (or closely associated with) the Executive Team, it may be a red signal. You may not be set up to win if your leadership is unwilling to take HR seriously.

However, if you’re happy with your current reporting structure, you might want to explore the following as you expand: A generalist and a recruiter should be hired. The generalist can aid with payroll, orientation, and training, among other things. The recruiter can handle all aspects of recruiting, including hiring coordination, ATS management, and ATS management. Though there is certainly opportunity for growth and expansion, these hires assist cover the basics and free up time for you, the HR leader, to focus on HR strategy and being a strategic partner within the organization.

What are the most critical HR needs for a small business: Though we’ve gone over some of the basic responsibilities of an HR staff in a small business, let’s go over some of the most crucial ones. What are the most important HR responsibilities?

Recruiting and Hiring: Your company will look to you to assist them in identifying and hiring the best candidates. Schedules will be coordinated, interviews will be screened, salary offers will be presented, and negotiations will take place.

Payroll and Benefits: In a small organization, HR is often in charge of payroll and ensuring that employees have the necessary paperwork and documents to be paid on time. You’ll support new hires with benefits while onboarding them, and you’ll prepare to manage open enrollment each year.

Learning and Development: Often, leaders entrust learning and development to HR. This could include providing management training and assisting them in becoming better leaders. It will most likely contain communication, teamwork, and personal development training. Though you won’t necessarily train employees in their specialized responsibilities, you will assist them in developing the other skills that the business requires.

Performance Management: Ideally, you work for a firm that invests in its employees and provides frequent coaching and mentoring. Even if this isn’t the case, most businesses conduct annual performance evaluations. Those procedures are usually facilitated by the human resource department.

Employee Engagement & Retention: Keeping people interested is one of the most crucial things a company can do. Otherwise, you risk losing talent…or worse, keeping unengaged talent who is simply dead weight. But don’t be fooled: involvement is more than ping pong tables and snacks. It’s about making individuals feel connected, acknowledged, and empowered. Let Motivosity show you how we can solve all of those difficulties for you if you need help with employee engagement.

Performance Management: Ideally, you work for a firm that invests in its employees and provides frequent coaching and mentoring. Even if this isn’t the case, most businesses conduct annual performance evaluations. Those procedures are usually facilitated by the human resource department.

Employee Engagement & Retention: Keeping people interested is one of the most crucial things a company can do. Otherwise, you risk losing talent…or worse, keeping unengaged talent who is simply dead weight. But don’t be fooled: involvement is more than ping pong tables and snacks. It’s about making individuals feel connected, acknowledged, and empowered. Let Motivosity show you how we can solve all of those difficulties for you if you need help with employee engagement.

Disciplinary action and Termination: Though few of us enjoy this part of work, you’ll have to let individuals go at some point. Occasionally, this will be due to natural exits or performance concerns. In other instances, it will be more serious and linked to disciplinary issues like as harassment, fraud, and so on.

Is it Possible for Small Businesses to Outsource Human Resources? It’s true that going without an HR team isn’t illegal, but that doesn’t imply it’s a good idea. Sure, you have the choice of employing a staff or delegating responsibility to the leadership. Companies also have the option of outsourcing their HR functions to a third party. “HR outsourcing is a contractual agreement between an employer and an external third-party provider in which the employer transfers the management of, and responsibility for, some HR tasks to the external provider,” according to SHRM. To put it another way, you hire someone who does not work for you to help you with your HR needs.

Let PlatinumHR be your resource.

Thank you for reading!