Regardless of the size, companies need human resources (HR) to handle certain aspects of the company, like employee well-being. However, a lot of small businesses often forego the HR department mainly because of budget constraints. If you don’t have in-depth training when it comes to handling employee issues, things can go haywire.

If you have employees, you need to start thinking about human resources for small businesses. This article will outline what HR is and the reasons why you need one for your small business.

What is Human Resources (HR)?

Human resources (HR) play a pivotal role in businesses. They’re mainly the ones in charge of recruiting, hiring, managing, onboarding, training, and delivering employee benefits to the entire company’s staff. Basically, anything related to the employee’s well-being and development (and sometimes more) falls under the HR department’s responsibility. They’re a resource for humans in your company.

More than that, human resources for small businesses help create employee strategies and implement those to ensure that the company has the right team in place.

Reasons Why Small Businesses Need HR

At this point, you know what HR is and a bit of an overview of their responsibilities. Now, we get to the “why” part of HR. What makes HR a critical part of a small business? 

Let’s look at  these six reasons:

1. Compliance with rules and regulations

As a rule, employees under the human resource department should be knowledgeable about the ins and outs of business and employment law. Even one overlooked detail of hiring and firing employees could turn into a lawsuit which could put the entire organization at risk. Your company’s HR department works to keep you from falling into this trap and ensures that you stay compliant with the state’s rules and regulations regarding labor matters.

Depending on the state where a business operates, the company might be required to post posters that contain information and updates about the labor force. This could be OSHA regulations, updates about minimum wage, unemployment insurance, sick leaves, and more. They’re well-aware of where these posts should be posted so that it’s easily accessible to the company’s employees.

2. Effective recruitment and hiring processes

The process of recruiting and hiring can be time-consuming. If you’re a business owner with a ton on your plate, this is something that you simply don’t have enough time to deal with. If your company has some positions to fill, you need a dedicated HR team to do the hiring process for you.

Human resource managers are trained and well-versed with the different things they should look for in a candidate. By asking the right questions, they can immediately tell whether the person is the perfect person for the job or the worst. If you want your company to be a success, one of the crucial things you need to do first is hire the right people, and HR Cloud can help you with that.

3. Manage employee files

Did you know that companies need to keep a lot of files for a single employee? For instance, you need to have an I-9 file, medical insurance files, pages-worth of employment contracts, personal data, and more for every person working for you at the company. While this may sound easy if you only have two or three employees, but if you’re running an organization composed of more than 30 employees, keeping track of these files, on top of your other responsibilities as a business owner, could quickly become a nightmare. Worst case scenario, you could pay thousands of dollars in penalties if you misplace or forget to fill out these forms.

This is then where your HR team steps in. As they’re trained to handle any employee-related matters in your company, they know what files each employee should have. They will also follow up with the employees if they need them to fill out a form to complete the files. HR managers would know how to store these documents, so it doesn’t get lost, and your company doesn’t get penalized.

4. Training and development

It’s important to make your employees feel that they’re growing together with the company. That said, you have to provide all the necessary resources to help them gain and develop new skills to take on more functions in the company.

You may not know it, but your HR team could do the research for you and find free or low-cost training options for your employees. After they take the course, the HR will then follow-up with their progress through employee performance reviews. Once that’s done, they can evaluate the employees’ development and verify whether they would be fit to take on more tasks or more challenging ones in the company.

5. Come up with an employee handbook

Handbooks make it easier for employees (especially new ones) to keep up with the company’s rules and regulations. It outlines what you expect from your employees and can be used as a reference in solving disputes.

The creation of the company’s handbook is primarily the responsibility of the HR department. They will come up with do’s and don’ts within the company, set up regulations, and present the final write-up to the managers and business owner(s). Once they have been approved, the HR then proceeds to implement the rules throughout the company. They will also be responsible for updating the policies annually or if changes in the organizational structure happen.

6. Improve employee satisfaction and morale

The ability to maintain customer satisfaction and keep the team’s morale up is vital in employee retention. HR can help create strategies that will help the employee grow career-wise so that they will feel empowered. When they’re empowered, they will find meaning behind their jobs and become more productive.

HR managers also help in resolving employee issues as it relates to the workplace. When they sense that an employee isn’t as productive as they were before, they can take action and investigate the reason behind it. Whether it’s a health issue, pregnancy, work-related, debt, etc., they can offer resources that can help them resolve their problems so they can go back to doing their best at work. The company’s efforts towards the well-being of the employee will instantly boost their morale and increase satisfaction.

Final Thoughts: Does Your Business Need an HR?

The short answer is yes. Your employees are a big asset to your company, and if they quit, it could be a big loss to your company. Most of the time, the reason behind an employee leaving is that they fail to find meaning behind their work or they’re not appreciated enough in the previous companies they worked for. With an excellent HR team, you can ensure that all their needs are met at work. This will increase your chances of building a company environment that will make employees feel comfortable, happy, and productive.

Categorized in:

Tagged in: