Human Resources Management for Small Business

Human Resources management
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Liz Strikwerda

Content strategist and corporate blogger (2000+ posts). Her work has been featured on G2's Learning Hub, Human Resources Today, Better Buys and over 500 business websites. She plays bluegrass mandolin and enjoys sailing her catamaran and hiking in the red rock wilderness of southern Utah. Connect with me on LinkedIn

Effective Human Resources management should be a priority. Take care of your employees and they will take care of your customers. Don’t assume that your business can thrive if you take a haphazard approach.

What is the Goal of Human Resources Management?

  • Help employees feel valued and respected
  • Promote unity and sense of common purpose
  • Inspire employees to believe in your mission
  • Ensure business operations are effective and efficient
  • Maintain compliance with workplace laws

What are the Duties of Human Resources?

In small businesses, a Human Resources generalist wears many hats. As companies grow, they hire Human Resources specialists. Following are duties that fall under the Human Resources department.

  • Recruit and hire employees
  • Establish policies and procedures
  • Manage onboarding and training
  • Respond to employee concerns/conflicts
  • Process payroll
  • Administer compensation programs and benefits
  • Conduct performance reviews
  • Maintain a safe workplace
  • Manage engagement programs
  • Measure and analyze Human Resources metrics

What HR Functions do Small Businesses Outsource?

In contrast, many companies outsource Human Resources functions. This allows business owners to focus on their core business. In other words, operations that directly generate revenue.

The following tasks are commonly outsourced:

  • Payroll services
  • Background screening
  • Recruitment/hiring/temp staffing
  • Benefits administration
  • Performance management

When do I Need an HR Department?

Of course, every small business’ staff has its own characteristics. A company with home health aides differs from a call center. With that in mind, are some issues to consider:

How Many Employees Do I Have?

The regulatory burden increases as your workforce grows. Of course, all employers are subject to the Fair Labor Standards Act (FLSA) regardless of size. When you hire your 11th employee, you are subject to the Occupational Safety and Health Act (OSHA). At 15+ employees, the Americans with Disabilities Act (ADA) kicks in. Similarly, when your staff hits 51, the Affordable Care Act (ACA) applies. And so on. Certainly, seek a trained Human Resources professional if you don’t understand your compliance obligations.

Are We Growing Quickly?

Indeed, rapid growth brings many changes. Fortunately, Human Resources can help you manage the employee side of business growth. First off, you will need to ramp up hiring. Secondly, payroll becomes more complicated. An HR director can help you maintain your pace of growth.

Is My Workload Making Me Crazy?

Most small business owners can relate to this one. Are you putting in 60-hour weeks and can’t stay on top of everything? Clearly, you can’t keep this up forever. Something needs to give. An experienced HR generalist can ease your workload. Consequently, you can focus on your business plan. You’ll make better decisions if you’re not stretched in every direction, for instance.

My Employees Aren’t Sticking Around

Do you have a high turnover rate? If you do, you most likely need to improve your company culture and an HR generalist can help you. Similarly, if you have no idea if your turnover rate is high, take that as another sign that you need an HR professional.

I Want To Manage HR Myself

Perhaps you aren’t ready to hire an HR person. Technology can help you until you can justify the cost of an HR director.

Small Business Human Resources Management Software

  • Payroll software ensures your employees are paid accurately and on time.
  • Applicant tracking systems simplify everything involved with hiring.
  • Employee timekeeping/scheduling/PTO tracking software automates core daily processes.
  • Project management software helps you keep your projects and client billing on track.
  • Accounting software keeps your financials straight.

Human Resources Information Systems (HRIS)

You may want an all-in-one solution. Human Resource Information System (HRIS) and Human Resources Management System (HRMS) are both complete HR platforms. Each is an integrated suite of tools to handle all aspects of Human Resources management. Improve Human Resources management by work tech designed for the small business owner.

Simplify HR management today.

Simplify HR management today.

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