Making HR An Effective Part of Your Small Business

by Michael Haberman on January 2, 2014 · 3 comments


Small businesses must pay attention to HR as much, if not more, than big businesses.

Small businesses must pay attention to HR as much, if not more, than big businesses.

This is a guest post that I thought was very relevant to the New Year.

Nearly 6 million businesses in the U.S. are paying employees, reports the U.S. Census. Maintaining good human resources practice is a legal obligation for your small business. It’s also your employees’ source of information on topics ranging from payroll to career advancement. Consider these suggestions and keep up your employee morale, improve retention and create an environment where people are eager to work and help your business grow.

Focus and Measure Your HR Efforts

Zane Benefits writes that your HR activities will impact one or more of the following areas:

  • Employee morale
  • Employee retention
  • Productivity
  • Relationship building
  • Trust within the office

With each activity, determine how to measure the effectiveness of your actions. For example, your goal is to work on productivity. You decide to implement a bring-your-own-device (BYOD) policy in the company. You could design an employee survey to give before and after implementing the BYOD policy and compare the productivity responses. Or you could identify the metrics to track such as number of phone calls made or the length of time to fulfill a customer order. The trend over time of the metrics helps you gauge the effectiveness of the new policy.

Determine the Right Message Medium

What are the best ways to communicate HR topics to your employees? It will vary based on the job type and office setup. Notices on the wall of the break room might not be seen by staff working out in the warehouse. Emails can go unread. Group meetings may be missed because of work deadlines. When deciding how to get your HR messages out, consider:

  • Who will be the audience?
  • What tools do you have available?
  • How often do you need to communicate?

You may find a mixture of message types is needed to cover all of your communication bases. You could have a monthly newsletter to announce upcoming HR changes, and highlight a different policy each month. Hold a quarterly meeting to review questions and concerns about employee handbook topics. An online, searchable HR knowledge base will allow employees to find answers to their questions themselves.

Tools That Support HR Efforts

If you are a new business and are still establishing your operational structure, look at how some of the available technology can help several areas of your business at once. For example, Intuit free bookkeeping software will streamline your accounting tasks, and it also makes the recording and tracking of employee expenses easier. You’ll get better compliance when it’s easier for employees to enter their expenses. You’ll have better visibility of expenses, and your invoicing will be more complete when passing those costs onto your customers.

Outsourcing HR

Large companies have done this for years and Inc. says it’s time for small businesses to look at outsourcing some of the HR activities. You can give the creation of employee manuals, and policies and procedures guides to a third party. HR self-service capabilities such as changing personal information and requesting 1099s can be done with a third party.

When theses types of tasks are outsourced, your HR staff have more time for the human interaction types of work. Coaching of staff on their career paths and discussions about performance issues are items you can’t outsource. But freeing up time for HR to handle these tasks is valuable and can justify an outsourcing decision.


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{ 3 comments… read them below or add one }

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Malorie July 17, 2014 at 3:53 am

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