More than 50% of small business owners assign HR-related tasks to employees responsible for other work. Meaning, the people handling this all too important business function have little to no expertise in HR responsibilities.
Since many small businesses underestimate the importance of HR, they fail to grow and attain the goals that they have set up for themselves.
Even if they realize the importance of the HR function, they might not have the budget to allocate to hire an HR professional. And if they do, they don’t have the budget for the initiatives these professionals may propose. As a result, the small enterprises fail to realize the contribution that HR could have made to the business’s success.
The Critical Role of Human Resources
The basic functions of any HR department, be it a small firm or a large enterprise, including hiring, developing, and retaining talent. Yet it has a much bigger role if the HR professional handles it effectively. The HR function sets the workplace culture and the environment. HR also helps streamline internal communication processes and helps tackle and settle workplace disputes.
In a small business, assuring employee performance, retaining talented and high-performing employees, and maintaining a commitment to the job is the only pathway to success. According to Glassdoor, businesses that invest in a strong candidate experience improve the quality of hires by a staggering 70%.
Furthermore, employees who are disengaged are two times as likely to look for new jobs compared to engaged employees. These statistics prove that investment in HR is the tool to attract and retain high-performing employees who form the basis of new firms.
However, since small businesses have more restricted budgets to allocate to HR initiatives that help engage employees, here are some high-impact solutions for HR functions in small businesses:
The HR function carries out a plethora of activities including developing a benefits package for employees that meets their needs and industry standards and planning team-building activities that keep the employees engaged in the workplace. They also facilitate and plan training for the development of the human capital and also communicate to them about the work ethic expected of them like diversity training.
However, with the limitation of small businesses, here are the factors that must be considered when managing employees to make a strong impact and achieve most of what HR is responsible for manging:
Hire the Right Person
Hiring is one of the toughest processes and decisions for a firm of any size. This is because a wrong hire or hastily hired employees might not prove to be aligned with the company’s goals and the demands of the role.
A wrong hire might result in disrupting the company culture, a rise in problems in the workplace, and leaving no choice but to start the recruitment process all over again to replace them.
Even if small businesses do not have the budget to do a thorough background screening and extensive interviews, it is a step that should not be disregarded.
Classify Employees Correctly and Set Clear Job Descriptions
Asking behavioral questions during an interview helps in gauging the personality of the employee. Furthermore, it is also important to classify them correctly as part-time, full-time, contract, non-exempt, or exempt employees. These classification rules should be included in the employee handbook.
Candidates should also be briefed on clear job descriptions so they know exactly what they are expected to do and the way they should perform to meet the performance standards. Clarifying the job descriptions also contributes to hiring the right people for the job rather than just hiring based on a gut feeling that the person will be able to fulfill the demands of the role effectively.
If you want employees to feel that they are a part of a professional work environment, it starts with the onboarding process. If the onboarding process is hasty and does not include a thorough briefing about the company and the job role, it will leave an impression that the company, whether it is big or small, does not value the contribution of the employees.
Having an onboarding process mapped to the tee (the first day, month, first three months) contributes to a positive work environment, makes employees feel valued in the organization, and strengthens the company culture which is in its developing phases in new and small organizations.
Document Employee Performance
When a company of any size hires employees, keeping a record of the performance of the employee is necessary. Since the employee-employer relationship is not casual, but professional, delivering performance feedback and developing objectives for the upcoming months is important and can only be done if the performance of the employee is documented.
This is also important if the company wants to off-board an employee. Justifying poor performance through performance records will assure that the company is safe from legal action, thus additional expenses. Similarly, performance records are valuable for assigning new roles and responsibilities to the employee, giving them a raise, or promoting them to a higher level.
Develop and Maintain an Employee Handbook
Whether big or small, if a business wants to operate professionally and grow because of clear and specified processes, a book outlining the rules, policies, and procedures of the company is essential. This is the employee handbook which is the go-to manual for company operations. It is also necessary to assure that the company is in line with the federal or state employment laws.
The handbook should also be accessible to employees so that they understand what the company stands for. Also, keeping it updated according to any new laws passed that concern the employees or the industry is also necessary to avoid legal action.
Focusing on Employment Laws
Lack of focus on employment laws is one mistake that companies that lack a proper HR department make.
Apart from entering the policies and procedures in the employee handbook, it is also important to keep these policies in practice, especially if they are related to employment laws. Disregarding the laws can lead to legal action which can jeopardize the existence of small businesses. It may also result in a weak organizational culture which contributes negatively to the growth of the firm.
Outsource Your HR
If the business is small and cannot afford professional and experienced HR professionals in-house, then outsourcing the HR function can help identify the issues as well as form an action plan for forming high-impact HR solutions for the business.
Companies such as GritHR Solutions allow the company access to expert resources that can give suggestions that are relevant to the business size, level, and industry. Therefore, it will help in allocating budget in the processes that will give the most impact based on the issues identified.
Summing it Up
Small businesses might not have enough budget to allocate to a proper HR department, but it is necessary to invest in some high-impact HR functions to get the best talent, engage it, and retain it in the company since they become the basis of growth for the organization.
Consulting with an HR outsourcing firm, like GritHR Solutions can help gain legal as well as HR-related advice which can be implemented to help the company address issues that are occurring or are most likely to occur.