human resources

Why HR Should Be a Priority for Small Businesses


  • There is more to employing workers than paying them every other week and giving them two weeks’ vacation time.
  • A Human Resources administrator or department is dedicated to helping you hire and fire, handle conflicts, and deal with labor law compliance and safety matters.
  • You can build an HR department that handles everything or choose to outsource some (or all) HR tasks.

Being unaware of a regulation is no excuse for violating it. Once you hire an employee, you must comply with a raft of federal, state, and local laws. A typical small business owner may lack the knowledge of all the existing regulations, which is why a human resources department should be a priority before the first employee is hired.

The Benefits of Human Resources

Benefit #1: Human resources help you find and hire the right people. A small business, in particular, is extraordinarily dependent on every single employee. You need the best possible person in each position so that your business grows and prospers.

Once you hire an employee, you must comply with a raft of federal, state, and local laws.

On the flip side, if individuals do not contribute properly, HR can fire them.

Benefit #2: HR handles all the required employee documentation. Taking care of the records yourself is time-consuming, and—if you don’t know what you’re doing—you could run afoul of a law or regulation without knowing it.

Benefit #3: HR handles conflicts, something most of us would rather avoid. If there is an issue between employees or between an employee and a manager, HR acts as a mediator to resolve the issue without breaking any rules or violating rights. Having a go-between can sometimes preserve a fragile relationship that might be on the skids otherwise.

Benefit #4: Human resources is the department that tracks and records employee training. To keep employees engaged and (in some cases) certified, you need to offer periodic training. HR monitors when an employee is due for training and keeps records of training session details and attendance.

Primary Human Resources Responsibilities

Safety: The core responsibility for human resources is keeping people safe. Occupational health and safety is very much the purview of HR. You need someone to assess the risks of your workplace, develop controls to reduce the risks, and keep employees safe. Be sure to walk the talk; if your employees witness your commitment to safety, they are more likely to follow the rules themselves.

Legal: HR is responsible for ensuring equal opportunity laws are followed and for protecting workers’ rights. Just a few examples of equal employment laws include:

  • The Civil Rights Act
  • The Equal Pay Act
  • The Uniformed Services Employment and Reemployment Rights Act
  • The Americans with Disabilities Act

Also, HR stores all employment records, such as a general employee file, an employee medical file, and immigration records.

Payroll and Benefits: Your employees expect to be paid on time with all relevant taxes and other withholdings taken out. To attract good employees, you may need to offer some benefits. Vacation pay, sick pay, enrollment in a health care plan, or providing a 401K savings plan are some of the possibilities. HR maintains these services as well.

80 percent of all companies outsource at least one human resources function. Click To Tweet

Tips from the Experts

Forbes recently brought human resources experts together to provide tips for businesses just starting their HR departments. Here are a few key quotes from their discussion:

Gina Trimarco of Pivot10 Results: “Determine your core values as a company. Have an HR team, not just an individual, so one can focus on compliance and administration while the other handles recruiting, retention, and training”.

Amy Douglas of Park Coaching, LLC: “Keep it simple. Small businesses often need to move and grow quickly. Develop programs, processes, tools, and decision support systems that meet your needs now and in the near future without too much complexity.”

LaKesha Womack of Womack Consulting Group: “Balance the cost of an HR department with the risk of going it alone.”

Another approach: nearly 80 percent of all companies outsource at least one human resources function. Simply Google “human resource service providers for small business” to find the best place to outsource some or most of your HR functions.

Human resources are a critical priority for businesses of any size. Small business owners often try to take care of HR functions themselves without the necessary knowledge of employment or payroll law. Before you hire your first employee, make human resources a priority by hiring an HR associate or outsourcing a portion of the work to a human resources service provider.

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