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Human Resource(HR) For Small Businesses: Tips & Tools

What is Human Resources(HR). Consider those two words for a minute. Does it mean anything to you?

To us, they speak to the art of nurturing and managing your team members in ways that lead to the best results for them and for your small company. Human resources (HR) is all about doing the best for your people, from the moment they respond to a job posting to their 25th work anniversary and beyond.

HR helps you find the right people to work for you. It helps you keep those people engaged and happy. It helps you implement the policies, infrastructure, and benefits that set your people and your company up for success.

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Why Is HR Important For Small Businesses?

What is small business HR?

Small business HR is the art of strategically leveraging limited human assets to achieve the best possible results. Properly executed HR initiatives can help small business owners achieve success by helping them tap into the full potential of their most valuable resources.

As the late author Sir Ken Robinson said, “Human resources are like natural resources; they’re often buried deep. You have to go looking for them, they’re not just lying around on the surface. You have to create the circumstances where they show themselves.”

Unleash the full potential of your human resources with the tips and tools below.

We might dare to ask: Why isn’t HR important for small businesses?

To put it in the simplest possible terms: HR is important for small businesses because it sets up your employees, and therefore your company as a whole, for success.

HR is the force that drives the processes, workflows, policies, and expectations that determine how people do their work and how people enjoy doing work at your company.

Here are just a few examples of what HR does for small businesses:

1) HR helps small businesses maintain compliance with relevant labor laws.

  • An HR professional specializes in understanding labour laws and helping you operate according to all the relevant guidelines. They can even help you properly handle an IRS audit if and when that happens.

2) HR helps small businesses grow.

  • With an HR infrastructure in place, you can maintain scalability in your hiring, training, retention, and personal development programs. (Otherwise, as you grow, you might have to first scale up your HR department before you can find and retain staff for other key business areas.)

3) HR helps small businesses maintain optimal efficiency.

  • When employees and company owners take on HR tasks, they often waste time just trying to figure everything out. Using HR services such as Plato will make HR more efficient so other strategic priorities don’t fall through the cracks.

4) HR helps small businesses find and keep the right people.

  • An HR department or robust recruitment service, such as Plato Recruit, can revolutionize a startup’s hiring process and onboarding process. This means you can find the new people you really need to grow your business while also boosting the retention of your current employees.

HR Basics & Compliance For Small Business

So what are some foundational HR tasks every small business should check off the list immediately?

Excellent question!

  • Payroll. Set up payment methodologies and infrastructure and also define and document your payroll processes. Paying employees, and doing so on time, is probably the most basic expectation every single employee at every single company shares. Getting this process right is therefore fundamental to your operations, especially since mistakes can drain your time, money, and sanity.
  • Employee benefits. Select an employee benefits package with adequate perks and healthcare offerings. This is critical as the details of your benefits, and also the administration of said benefits, will help you both attract and train employees. Some studies suggest that more than half of all potential employees consider benefits and perks central to their decision to accept a job.
  • Compliance. Read, understand, and comply with all the relevant laws and regulations in your location of business.
  • Licenses and permits. Make sure you have obtained official authorization to engage in all the relevant functions of your business.
  • Hiring. Iron out the hiring process, create templates for job descriptions and job postings, define requirements for creating a new job, and establish candidate requirements, including testing protocols and background checks. Nail down these hiring nuances in your company’s early stages, and you’ll be able to grow seamlessly and painlessly down the road.
  • Time keeping. Decide if and how to track time using helpful time tracking tools such as NiftyPM. You’ll need to communicate this protocol to employees as it will heavily influence their experience and day-to-day workflows.
  • Policies. Write attendance and absenteeism policies, vacation policies, termination policies, and more—the list could go on and on. Documenting and making transparent these policies will save you headaches and provide much-needed guidance as you encounter the vast range of situations that arise in the course of running a small business.

HR Advice & Tips For Small Businesses

After you have your core HR infrastructure set up, you can try layering on some extra options to boost your company culture and make your employees’ experience as good and organized as possible.

  • Processes. Establish and document the protocols for training, performance management, performance reviews, employee engagement, and more. Having these processes standardized and documented will help you grow your team and also build on the knowledge and expertise of your employees.
  • Employee files. Create and manage files with sensitive employee information, such as performance reports, disciplinary actions, W-4 forms, and payroll details. These files are important as they provide all the information you and anyone else may need to access in the future to justify actions or, in the worst case scenario, provide information to lawyers.
  • Employee handbook. Create documentation that makes clear and transparent all the processes and protocols you’ve established.
  • Focus on employee engagement. Don’t underestimate the “human” element of human resources. Make employees feel valued by boosting your company culture with NectarHR, or visiting Swag.com to find customized gifts and goodies to make them feel good. Achieve engagement to enjoy potential benefits like increased profitability, lower absenteeism, and decreased turnover.
  • Refine your communication. Try meeting all the Society for Human Resource Management’s (SHRM) metrics for effectiveness, including access, availability, reliability, and adequate communication.
  • Streamline your staffing strategies. Make your hiring better by focusing on cultural fit and small-business acumen. Follow this tip from the Bonusly blog (one of 30 favorite HR blogs), and calculate retention rates to inform your hiring strategies and better distinguish the right person for the job from the wrong person.
  • Perfect your onboarding program. Experts say that companies waste time and productivity with slow and clunky onboarding processes. Small businesses simply can’t afford to experience any waste each time a new employee starts. Streamline the onboarding process until you’re sure (based on employee surveys and onboarding performance metrics) employees have everything they need to do their best work on or before their first day.
  • Perfect your employee development and training. Dedicate resources for keeping current  full-time employees engaged and developing new skills.
  • Learn about the current best practices. Attend HR conferences to stay up to date with changing laws, workplace trends, and industry-standard best practices.
  • Plan and prepare for disasters and emergencies. According to the U.S. Small Business Administration (SBA), 25% of small businesses that close due to a disaster never reopen. Luckily, the SBA also has all the information you need to create a comprehensive plan for evaluating your risk factors and developing preparedness and incident mitigation protocols.
  • Practice inclusive hiring. The SBA has a complete list of resources small businesses can use to understand how to hire individuals with disabilities and also learn about financial incentives and benefits this practice may open up.
  • Focus on company culture. Building a thriving company culture can create the illusion that some HR tasks are just doing themselves. Better work just happens when employees are engaged, recognized, and appreciated.

HR Tools & Software For Small Businesses

1) Plato Recruit

“Dedicated HR experts at your fingertips”

Human Resource (HR) For Small Businesses

What role does this software play for your small business?

A must-have HR tool, Plato Recruit help employers recruit and post jobs with ease for free.

What impact will this software have?

Plato Recruit will free up your time to focus on growing and managing your business. And while you focus on long-term priorities, you’ll enjoy peace of mind that the nuts and bolts of your HR administration are in good hands.

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