The Importance of human resources management in small business

If you run a small business, you know that your employees are the lifeblood of your operation. This is why human resources management is such an integral entity that shouldn’t be overlooked.

Human resources managers are responsible for protecting employees from any type of workplace discrimination or safety violation. They are also the first line of defense in protecting the company from breaking laws or failing to meet regulations that would lead to legal ramifications and a requirement to engage the services of an employment discrimination lawyer – click here to learn more.

In this article, we’ll focus further on the importance of human resources management in small businesses.

What Does Human Resources Management Entail?

Talent Recruitment

Talent recruitment goes well beyond posting a position online and hoping solid candidates reply. It is a multi-step process, which we’ve broken down here:

1.Identifying qualified candidates

It is the role of human resources to find qualified candidates to join your company’s team. They must look at the requirements of a given position and find individuals who possess the skillset and level of work experience needed to fulfill it.

Furthermore, they need to evaluate if the individual is a good fit for the company culture you’ve established. Will this person get along with the other team members? Does he or she share the company’s values and communicate a strong interest in the work the company does?

Job posting sites like Indeed and LinkedIn are a good way to cast a wider net. More targeted tactics include the company’s social media accounts and networking events. Then there’s your existing staff. They already know the company culture and demands of the job. Offer referral incentives to encourage them to suggest candidates they feel would make a good addition.

2. Assessing candidates

Step one is finding qualified candidates, but step two is ensuring they truly are qualified. This includes: thoroughly reviewing the person’s resume, conducting interviews to assess their personality and compatibility with the company, preparing and administering any employment tests the company requires, and conducting background checks.

3. Negotiating job offers

Once the human resources manager has identified a qualified candidate and thoroughly evaluated their capabilities, the next step is to seal the deal with your offer. This may require some negotiating to strike a balance that appeases both the company and the candidate.

Human resources managers must be knowledgeable about recommended wages and labor laws of the state your company operates in. They should also be able to advise you, the business owner, as to what payment offers are fair based on a person’s skillset and level of experience.

Flexible work time and benefits are other areas a human resources manager needs to be proficient in. Let’s say an employee needs to work from home for a number of days per week, it’s the job of human resources to work out that scheduling agreement and ensure that the individual has the necessary tools needed to work remotely.

Managing the Business’ Administrative Tasks

Think of every new employee as a long-term investment the company is making. Once they’ve been hired, they need to be properly onboarded and trained to ensure they are being set up for success.

1. Processing paperwork for new hires

When a worker is hired, the human resources manager needs to process the necessary paperwork to document their employment, such as social security contributions, health benefit contributions, and tax payments. This includes verifying the individual’s job with the company to the IRS. They will also need to draft the worker’s job contract and walk him or her through its’ contents.

2. Onboarding, orientation, and training

Human resources managers are tasked with welcoming new hires. They introduce them to the company, their immediate superiors, and show them where they will be working.

They also handle the worker’s orientation. This includes: walking the new hire through the company handbook; showing them their workspace and providing them with the tools they’ll need to perform their job effectively; and conducting any training processes, i.e. seminars, classes, etc. that the person must complete before continuing in their new role.

3. Drafting procedures and processes

The human resources manager oversees the employee handbook which serves as a guideline for the ways in which an employee is expected to conduct themselves in the workplace. They are the ones who manage this document and are responsible for keeping it up to date. If ever changes or amendments are made, they must ensure that all employees receive the updated copy.

They are also responsible for drafting the procedures put in place to support a business’ practices with regards to vacation days, sick days, maternity leave, and employee turnover – be it by termination or quitting.

4. Managing employee data

Human resources managers are responsible for implementing a system for filing all employee paperwork to ensure that it remains safe, organized and easily accessible. Since they manage private information on behalf of the company’s staff, these systems must also be in compliance with the given state’s confidentiality laws.

Compliance with Labor Laws

1.Preventing workplace discrimination

Every state has labor laws in place to protect employees from discrimination or termination on the basis of gender, sexual orientation, age or disability status. It is the job of human resources managers to enforce the company’s compliance with these laws.

2. Meeting health and safety regulations

Securing the safety of a company’s workforce falls within human resources managers’ administrative duties. Larger companies may employ a designated department for safety and security, but for smaller companies, this will fall under the purview of human resources.

This includes ensuring that the company is meeting health regulations. For instance, with the COVID-19 pandemic, human resources managers are the ones to ensure that the company is adhering to CDC guidelines and requirements for PPE.

3. Reviewing official compliance documents

Human resources managers are the ones to review official compliance documents and ensure that they are always kept up to date so that the team is abreast of the current local ordinances.

Ensuring a Healthy Working Environment

In addition to recruiting new employees, human resources managers are continuously focused on creating a positive working environment for existing staff.

1. Settling in-office disputes or conflicts

Employees don’t always see eye to eye and it’s inevitable that conflicts will arise from time to time. Employees should be encouraged to speak with direct supervisors about team-related issues, but in the cases where that doesn’t suffice or the issue is too big to be settled with a simple conversation, that’s where human resources needs to step in.

Human resources managers should have systems in place for settling such disputes, which involves speaking with both or all parties involved, coming up with a solution and enforcing that it’s being carried out.

2. Creating company culture

As we stated in our intro, a company’s employees are what keeps it running. The happier they are at work, the better they will perform. Human resources managers are the ones to oversee the creation and implementation of a company’s culture.

What is the environment you wish to create? Do you want it to be collaborative with a value on innovation and ideas? Perhaps you host regular company-wide meetings to highlight different wins the team has had. Do you want to cultivate a sense of team camaraderie? You can host events like work happy hours or team outings. Human resources, in conjunction with company leaders, are the ones to implement such initiatives.

Tracking Employee Productivity

Companies should have systems in place to measure an employee’s growth and progress. This will help leaders to evaluate when promotions and pay raises should be issued, or if an employee isn’t meeting the standards of their position. Human resources managers are the ones to create and enforce such systems.

1. Performance reviews

Employees need to know there is a path for growth within the company and that their hard work will pay off. Performance reviews give employees a chance to hear what they are doing well, where they need to improve, and what goals they must achieve in order to reach that next step in the company, typically a promotion. Human resources managers will work with company leaders to create these systems for evaluation.

2. Guidelines for termination

Employees need to know what is expected of them so they can, hopefully, meet those expectations. The implementation of performance reviews and employee evaluations are also a way for supervisors to demonstrate to employees when they are not meeting the standards that the company and their position requires.

Businesses need to have a procedure in place for employee termination – ensuring that the employee is given clear notice that they are not meeting the needs of their position and explicit instruction as to how they can do so. You never want an employee feeling completely caught off-guard that they are being fired.

When Small Businesses Avoid Having Human Resources Management

When a small business refuses to have its own human resources management team, owners tend to delegate certain human resources tasks to their team leaders. This can be risky especially since the task of organizing and processing paperwork requires knowledge of labor laws.

If you’re a small business owner who does not have the budget to hire a full-time in-house human resources manager, you may want to consider outsourcing such services on a more as needed basis.

Other than outsourcing human resource management in small business tasks, you can employ the expertise of a human resources consultant. A consultant can help you identify managers on your team who can take on human resources roles and also train them to do so.

Keep in mind, anyone taking on a human resources role will have to be familiar with the labor laws of your state as well as health and safety regulations that the company needs to comply with. It is a large undertaking so we do suggest outsourcing, at the very least.

Having Human Resources for your Business

Human resources management in small business doesn’t have to be an entire department, as it typically is for a larger company. If you have a small team, you can employ one manager to start. As the business grows and you add more people to your staff, this can include more people to your human resources management team.

Just like you need a healthy cash flow to keep operations running smoothly, you need human resources to ensure a healthy and productive workplace. It is crucial in ensuring you are complying with the law and that your employees feel safe and valued at work.

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