Why Small Businesses Need HR: A Guide for Owners

person s left hand holding green leaf plant representing HR.
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Many small business owners may wonder if they need to hire a human resources (HR) manager or outsource their HR functions to a professional service. The answer depends on several factors, such as the size of the business, the industry, the legal requirements, and the goals of the owner.

The way your employees feel is the way your customers will feel. And if your employees don’t feel valued, neither will your customers.

Sybil F. Stershic

HR is responsible for managing various aspects of employment, such as recruitment, training, performance evaluation, compensation, benefits, employee relations, compliance, and safety.

HR creates and maintains a positive work culture, enhances employee engagement and retention, and supports the strategic direction of the business.

What are some benefits of having HR in a small business?

  • Saving time and money by handling administrative tasks and reducing legal risks.
  • Improving productivity and quality by hiring the right talent and providing training and development opportunities.
  • Increasing employee satisfaction and loyalty by offering competitive compensation and benefits, addressing employee concerns, and fostering a respectful and inclusive work environment.
  • Enhancing the reputation and brand of the business by demonstrating social responsibility and ethical practices.

Recommended video for hiring right: How does Apple hire people?

What are some challenges of having HR in a small business?

woman in white blazer holding tablet computer working as HR manager for a small business.
Photo by Andrea Piacquadio on Pexels.com
  • Finding qualified and experienced HR professionals who can handle multiple roles and responsibilities.
  • Allocating sufficient resources and budget for HR functions and activities.
  • Balancing the needs and interests of employees and owners.
  • Keeping up with the changing laws and regulations that affect employment.

There is no one-size-fits-all solution for HR in small businesses. Each business owner should assess their own situation and determine what level of HR support they need.

“The function of HR is not to be a cop. It’s to be a coach and counsellor to help people grow and develop.” – Lou Holtz.

What are some options for small business owners?

  • Hiring a full-time or part-time HR manager or specialist who can oversee all or some of the HR functions.
  • Outsourcing some or all of the HR functions to a third-party provider who can offer customized services and expertise.
  • Using online tools and software that can automate and streamline some of the HR tasks.
  • Seeking advice and guidance from professional associations, consultants, or mentors who can offer best practices and insights.

Read this post to know about the benefits of outsourcing HR to a third party service provider.


Conclusion: Do small businesses need HR?

Human resources isn’t a thing we do. It’s the thing that runs our business.

Steve Wynn

HR is an important function for any business, regardless of its size. Small businesses can benefit from having HR support in various ways, but they also need to consider the costs and challenges involved.

By evaluating their needs and options, small business owners can find the best solution for their HR needs.

If you are a small business owner and would like to discuss what’s best for your requirements, send me a message now!

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What are some common HR policies for small businesses?

There are many HR policies that small businesses can adopt to ensure smooth operations and a healthy work environment.

Some of the most common HR policies include:

  • Timekeeping policies: These policies help accurately monitor and document work hours.
  • Social media policies: These policies guide employees on appropriate professional use of social media platforms.
  • Performance evaluation policies: These policies clearly convey how employees’ roles are assessed and how their performance is rewarded.
  • Health and safety policy: This policy outlines the company’s commitment to providing a safe and healthy work environment for all employees.
  • Leave and time off work policy: This policy outlines the company’s policy on vacation, sick leave, personal days, and other types of leave.
  • Employment classifications policy: This policy outlines the different types of employment classifications, such as full-time, part-time, or contract work.
  • Non-discrimination and anti-harassment policy: This policy outlines the company’s commitment to providing a safe and inclusive work environment free from discrimination or harassment.
  • Termination policy: This policy outlines the procedures for terminating an employee’s employment.

These are just a few examples of HR policies that small businesses can adopt to ensure smooth operations and a healthy work environment.

By BMB Staff

Business Management Blog is your online resource for business management and strategy articles, insights, ideas and tools. We talk about Business Management, Strategy, Customer Experience, Employee Engagement, Leadership and Career Growth. Subscribe to the blog to get updates about new posts.

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