The Essential Role of HR Services for Small Businesses

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HR services can be a vital part of any organization, regardless of stage or size. That's because HR may be responsible for practically every facet of an employee's experience in the company. The potential core value of HR is making every employee feel safe and productive while receiving the necessary support and direction they need to thrive.

Many small businesses may rely on HR departments to manage a comprehensive range of functions and responsibilities, including recruitment, employment laws, job descriptions, performance management, employee satisfaction, and creating a positive employee experience.

This article will explore the potential value of HR services for small business and uncover critical strategies that may enhance HR operations to drive growth and efficiency in your company.

The Importance of HR in Small Businesses

Small-business owners often face unique HR challenges due to limited resources and a lack of HR expertise. They may be time-strapped, dedicating much of their time to developing the business and improving their products and services. The day-to-day demands of their small business may lead them to neglect critical HR concerns, which can negatively impact the company's long-term success. 

Here are some examples of the distinct challenges small businesses may encounter in HR management and how an HR professional may help:

Effective Recruitment and Staffing

Hiring can be time-consuming and strain a small business's limited resources. A rushed interview process or failing to ask the right questions can lead to poor hiring decisions, potentially resulting in significant costs. 

Small business HR professionals may have extensive experience efficiently managing the entire recruitment process on their own. They may give small-business owners access to a wider talent pool beyond their limited resources.

For example, an HR professional can create targeted job postings on relevant HR platforms or job boards. They may solicit employee referrals and use social media to attract candidates. Examples include HR LinkedIn groups and industry-specific Facebook job groups. Through their relationships within the industry, small business HR professionals may tap into their professional networks to identify qualified candidates.

Training and Development

Investing in developing staff can be crucial for cultivating a competent and driven workforce. However, small businesses may struggle to create and execute efficient employee training and development programs. That's another critical area where HR professionals' expertise can help.

For example, HR professionals may design personalized training or know where to source the desired external training. To save on costs, they may be able to implement internal mentorship programs and use e-learning platforms to enhance employees' development.

Benefits of HR Services for Small Businesses

Here are some ways HR services for small businesses may add value to a small company: 

• Saving business owners time and energy to focus on the business
• Attracting top talent
• Creating a better onboarding process
• Increasing the rate of talent retention
• Providing advice and guidance regarding disciplinary procedures
• Ensuring the company offers a competitive benefits package
• Increasing employee productivity
• Managing training and development 
• Promoting employees' overall well-being
• Fostering a positive workplace culture
• Measuring and improving employee performance
• Maintaining workplace safety standards 
• Establishing hassle-free offboarding

All of these HR solutions for small businesses can position employees for success and, in turn, can help a company achieve its goals. 

HR in Small-Business Owner Leadership

Having HR management for small businesses can ease a small business owner's strategic planning process. Owners can benefit from expert HR advice on leadership imperatives, such as crafting a mission statement. 

Small-business owners often face unique HR challenges due to limited resources and a lack of HR expertise.

Moreover, before making significant strategic decisions, a business owner may need to rely on a strong back office with capable employees who can support the company's growth and success. HR can help you determine key insights, such as:

• Have you hired the right caliber of employees who can help you take your company to the next level?
• Are your employees sufficiently motivated to go the extra mile for you?
• Do all the departments in your small company share your common vision?
• Are you offering the best rewards and recognition for your employees' achievements?

HR professionals can be your top ally in accelerating your company's growth by focusing on the growth of your high-potential employees. Having an in-house small business HR function may help small-business leaders with organizational development by making sure employee training is aligned with their company goals and communications are clear and consistent across the company. This can help employees at all levels know and understand their role in the development of the business.

Organizational development often involves major changes a company needs to undertake to continue to grow and succeed. HR can help explain to employees why a change is necessary, how it will benefit them, and how it will help the company grow. 

An HR professional may also be the ideal spokesperson to explain what is expected of employees during change initiatives and the rewards for supporting the change. Above all, HR can be the ear on the ground who tells you how employees feel about a proposed organizational development plan and how employees can be best prepared. 

Performance Management in Small Businesses

Performance management may be vital for making sure employees are aligned with the company's goals, enabling them to make meaningful contributions to the company's overall success.

The many benefits of performance management and feedback processes may also include flagging and resolving shortcomings in performance, raising employees' abilities and skills, and improving employee productivity. They can also help recognize high performers. Above all, performance management may help open up an honest dialogue between employees and managers, which enhances teamwork and cooperation within the company. 

Given the importance of performance management, HR consultants can help small-business owners by creating and administering a performance management program and ensuring its uniformity and equity throughout the company. HR managers can also coach business leaders on how to have constructive conversations with employees about their performance.

Stay Competitive with Employee Benefits

Offering a robust benefits package can assist small-business owners in recruiting and keeping the best people and setting their company apart from the competition.

HR can offer helpful insights into the ever-changing landscape of employee benefits. For example, benefits can include fertility benefits, lactation facilities, transgender health care, mental health support, telemedicine, caregiving benefits, or a home office stipend, among others.

HR can survey employees to help business owners understand what benefits they want most. By structuring a more tailored benefit plan, HR can help a company save on the cost of unused benefits.

Benefits are not static. HR can conduct annual reviews of benefits offerings to ensure they continue to meet employees' evolving needs and help the company remain competitive. 

Acquire and Retain Top Talent

Today's competitive job market may make it difficult for a small business owner to find qualified people. According to a 2024 Global Talent Shortage study by workforce solutions company The ManpowerGroup, 75% of employers reported difficulties finding qualified candidates to fill their job openings, compared to 36% ten years ago. The company surveyed over 40,000 employers across 41 countries.

There may be many reasons why finding suitable candidates can be challenging. For one thing, qualified people can discover new openings – or even careers – all over the country. The gig economy may have also made it simpler for skilled people to find freelance work versus full-time. Additionally, applicants today may place priority on company culture when selecting an employer. HR consultants may help you update how you position your company in the eyes of prospective applicants to boost your chances of attracting a wider range of applicants.

Having HR services for small business can save a busy small business owner countless hours and days managing the hiring process, from screening resumes to interviewing and making recommendations.

In addition, hiring a freelance HR consultant can be a useful option. It may allow you to not only cut costs, but also gain a fresh perspective on applicants. These consultants may provide impartial and unbiased insights to assist you.

Offering ongoing training and upskilling opportunities to entice candidates may be more critical than ever in today's competitive market. Rapidly changing technologies and the increase in automation may require employees to have new skills to stay relevant in their careers. That's potentially an important area where HR can help position your company to attract and retain talent.

Build a Positive Company Culture

When a company culture is positive, employees may be more likely to feel happy, secure, and confident. A positive company culture can decrease employee turnover, boost morale and productivity, and entice top talent.

The State of Global Workplace Culture in 2023 report by HR association SHRM shows workplace culture matters, perhaps now more than ever. The study found employees of companies with a positive culture are more satisfied at work (58%) and more engaged and committed to their company (75%). The survey canvassed over 11,000 employees from 15 countries between December 2022 and April 2023.

One of the potential responsibilities of HR consultants may be ensuring all employees feel a sense of belonging and fostering a more inclusive workplace culture. For example, in partnership with small business HR, business owners can acknowledge heritage months.

Other ways HR can have a positive impact on the company culture include:

1. Establishing a positive impression of the company right from the start during the interview process
2. Developing an effective onboarding program to bring employees up to speed and integrate them into the company
3. Assisting small business owners in cultivating and representing the company culture
4. Crafting or reviewing policies to ensure behaviors and norms align with company culture, like trust, respect, and integrity

Unlock Company Culture Potential with HR

Here are five steps for creating a great company culture with the assistance of HR management for small business:

Establish your core values and define your culture.

At every opportunity, emphasize the significance of your company's core values and show how they align with the culture. With HR's assistance, you can write a clear and concise description of your company's culture and mission. A core value could be 'integrity,' which can mean: "We always act ethically; we give others appropriate credit for their work and don't take credit for others' contributions."

Promote open and constructive communication.

You can coach people to use honest and respectful communication that contributes to a healthy and productive work atmosphere for employees at all levels. Open and transparent communication can make employees feel trusted. For example, you can encourage managers to seek employee input before making significant decisions. Similarly, encouraging all employees to share ideas and disseminate knowledge regularly and freely can enhance teamwork and collaboration.

Support employee growth and development.

You can offer employees the resources and opportunities to enhance their skill sets and grow professionally. This may start with ensuring fair and impartial performance reviews and giving employees constructive and regular feedback on their work to help them succeed. Consider pairing employees with mentors to broaden their opportunities to learn. 

Make employee recognition a top priority.

Authentically recognizing employees in real time may be one of the most powerful ways to create a great culture where people feel valued and appreciated. You can set up a program to acknowledge and reward employees for outstanding performance. Showing appreciation can be reflected in the type of work assigned, the opportunities provided and increased compensation. It can be as simple as a thank-you note or a high-five for doing a great job. Recognizing employees can be a regular and integral part of your company's culture. 

Establish a wellness program to prioritize employee well-being.

Mental health services can be invaluable in making employees feel cared for and boosting their health and happiness.

There are many ways to foster employee well-being, such as:

• Train managers to treat employees with empathy and kindness, making them feel the company genuinely cares about their well-being.
• Make mental health services widely available and accessible to all staff.
• Observe how people go about their work to identify potential problems. This means paying attention to work patterns, such as consistent after-hours work and meeting overload, that might lead to burnout and stress and taking action to lighten the workload. Doing this can show employees the company cares for their well-being. 
• Promote work-life balance, for example, by offering flexible working hours as part of the wellness program.

The Takeaway

From establishing core values and defining the company's culture to creating a wellness program and supporting employee growth and development, HR management can play a significant role in unlocking the full potential of a small business's culture. These and other HR practices can create an inclusive and productive environment, benefiting the company and its employees.

Photo: Getty Images

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