Even if you have only one employee, you’re spending at least some time doing HR work. And the more employees you have, the more time you’ll devote to human resources issues, and that means less time to manage everything else and less time to grow the business.
Small business owners tend to think of HR in terms of employment benefits like health and hiring and firing. But the fact is, HR covers virtually everything related to your staff — from recruiting and training to attendance and communication (and many things in between).
What is HR?
Here is a basic list of responsibilities covered under the umbrella of human resources:
- Recruiting top talent
- Onboarding new hires
- Overseeing performance reviews
- Helping staff find professional development opportunities
- Overseeing training
- Keeping the work environment safe and healthy
- Handling communication between management and staff
- Creating a great employee experience
- Tracking attendance and hours
Why do I need HR?
When you are focused on running your business, it’s easy to let HR tasks fall through the cracks. 54% of small business owners say they are trying to handle everything on their own. But your employees are your most valuable resource; making sure they are engaged and productive is essential to your success.
To make HR a priority for you, you need help. Employment laws can be complicated. You don’t want to run into problems and face penalties because you missed a filing deadline — or didn’t know there was one. Other than hiring an in-house HR manager, there are alternatives. One option is to outsource HR to a Professional Employer Organization. They become a co-employer: You direct the work, set the tasks, manage the staff and the PEO takes care of the HR details. Other options include hiring an HR consultant or working with an on-call professional.
More commonly for small businesses is to designate an employee to handle HR issues. There are tools available to automate certain tasks — Zenefits is a popular benefits platform, my company’s Workful handles onboarding, time tracking and other tasks — so whoever helps with HR has more time to focus on personnel issues.
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Having someone oversee HR can help your small business in three big ways:
1. Manage employee requirements and records
As an employer, you should have the following three files for each member of your team:
- Personnel file, which includes hiring documents, performance review information, and any separation records;
- Payroll file, which includes salary and wage documents, W-4 and W-2 forms, time and attendance records, payroll deductions, and direct deposit authorization; and
- Medical file, which includes absence excuse notes, on-the-job accident or injury reports, workers’ compensation benefits, and insurance information.
Your HR delegate would be responsible for maintaining these employee records and making sure they are up-to-date and complete.
There are also lots of federal, state, and local laws to know. These include things like overtime pay, pay frequency, health and safety, family and medical leaves and tax forms. A human resources delegate will learn what’s required and ensure your small business is compliant. What’s more, they will be able to watch for changes to labor laws regarding things like employee classification, federal minimum wage, wage garnishment, fringe benefits, workers’ compensation, disability claims procedure, and equal pay.
2. Increase productivity
Putting someone in charge of HR is a vital step toward ensuring that your staff knows the company’s values and mission, and that everyone who works for you is on the same page. Your employees will be able to use your values to set goals that move your business forward.
Your HR delegate can develop training processes and find professional development opportunities to help your employees learn new skills to help them become more efficient.
Whoever oversees HR can even help write job descriptions for each person on your team, so everyone knows what their priorities are. Job descriptions can help make sure two people aren’t duplicating efforts by trying to do the same tasks. They also help keep your team accountable.
3. Create a great employee experience
Your employees are your most valuable asset, so try to give them a great work environment, where they’ll be able to succeed and be productive. The person overseeing HR can help create that environment in the following ways:
Match skills to tasks — If you want your employees to be happy and engaged, consider matching their skills to their primary tasks. The person in charge of HR can get to know each employee’s skillset and determine how they can be best utilized.
For example, if your HR person discovers that someone is organized, proficient with numbers, and detail-oriented, you might be able to delegate certain accounting tasks to that employee.
Address problems — An HR delegate can track time and attendance to keep an eye out for any problems. For example, they may see that someone on your team is working a lot more overtime than everyone else. Perhaps that employee needs help with time management or scheduling.
The HR delegate could also watch for excessive absences. Habitual absenteeism could be caused by low morale, being unsatisfied with the job, or even problems at home.
Whatever the case may be, your HR person can address any problems and help your employees find the best solution.
Mediate arguments — Workplace disagreements are unavoidable. Your employees won’t always get along or might not agree with the direction of a project. You need someone who can mediate interpersonal conflicts to help the involved parties reach an understanding, because unresolved disputes can disrupt your company culture, affect morale, and decrease productivity.
It can be tempting to put HR on the backburner if your small business doesn’t offer many benefits. But HR handles everything related to your employees, so it’s important to make it a priority – even if your team is small.
As a small business owner, your to-do list is already a mile long. Consider delegating human resources to an employee, rather than trying to manage it all yourself. An HR delegate can keep up with government regulations, help increase productivity, and create a great employee experience.