Employees are an integral component of any organization. As such, the human resources aspect plays a fundamental role in businesses of all sizes. This essential department is responsible for managing the employee life cycle, such as recruiting, hiring, and training, as well as administering employee benefits.
In particular, effective HR management helps small businesses streamline the functions of human resources, allowing for smoother operations, improved company culture, increased productivity, and more.
HR management offers numerous benefits to small companies that wish to gain a competitive edge while maximizing employee performance. Learn more about HR management and how this strategic approach can improve the effectiveness of an organization.
What Is Human Resources Management?
Human Resource Management (HRM) refers to the formal systems created for the management of employees within an organization. HRM professionals play a strategic role in helping companies develop the human capital required for success.
For most small businesses, the human resources department is responsible for:
- Overseeing job recruitment, hiring and promotion
- Managing employee benefits and wellness programs
- Creating and enforcing personnel policies
- Providing new hires with orientation programs
- Promoting employee job training and career development
- Delivering guidance in regard to disciplinary actions
- Acting as a contact in the event of a work-related injury
How to Build a Small Business HR Management Plan
There are many factors to consider when crafting a strategic HR management plan for a small company. Financial resources and budget play a key role, as well as turnover rates and market competition.
Begin with a thorough assessment of the current business and perform a Strength, Weakness, Opportunity, and Threat analysis of the current HR efforts. Next, establish HR objectives that align with the organization’s objectives. Look towards the future and consider what changes in HR could help the company reach these goals.
Before creating an HR management plan, it is also important to answer some important questions, such as:
- What is the company’s mission?
- What are the needs of the business’s employees?
- How can everyone within the company remain safe?
- What are the business’s benefits plan needs?
- In which areas is HR currently lacking?
- Where does the company stand regarding risk management?
- What local, state, and federal employment laws must be met?
- Does the employee handbook need updating?
- What policies need to be implemented?
Why Small Businesses Should Consider HR Management
Regardless of size, all businesses can benefit from having a dedicated HR team. Knowledgeable HR professionals can effectively administer benefits programs, training, and compensation. They can also advise managers on recruitment and employee relations.
HR personnel can act as a liaison between management and employees regarding an array of topics, such as company practices, policies, and regulations. They can also help ensure that all policies, procedures, and programs are administered in a way that aligns with company goals and complies with local, state, and federal laws.
Here are just some of the reasons why small companies should consider investing in HR management:
Identify and Retain Better Talent
Identifying and retaining top talent requires a major financial and time commitment. According to Glassdoor, the average employer takes approximately 23 days to find the right candidate. The process can take even longer when hiring for technical positions.
Staff must take time away from other important projects and priorities to manually shift through dozens or sometimes even hundreds of resumes which often include many non-qualified applicants. Once qualified candidates are found, the company needs to conduct interviews and ultimately begin the onboarding process.
Employee training begins with onboarding but does not end there. It’s crucial to provide consistent training to employees to ensure they remain in line with their duties. This is also a chance for HR to help team members adapt and grow by providing upskilling opportunities. Providing employees the opportunity to evolve and advance their careers is a key factor in employee retention.
Improve Employee Onboarding
Onboarding has long been a critical process used by organizations to get new employees oriented and on a path towards success. According to a Harris Poll, 93 percent of employers agree that strong onboarding is key to inspiring a new hire to remain with a company.
The onboarding process does not just offer benefits to employees. Businesses that devote time and resources to attract the right people can also gain a competitive advantage. When the onboarding process is engaging, educational, and enjoyable for employees, they are more likely to have greater productivity compared to employees that encounter a subpar onboarding process. Stronger onboarding processes enable new hires to be successful from the get-go.
Adopt a More Inclusive Workplace Culture
Adopting a diverse and inclusive workplace culture can provide employees with a sense of belonging. When employees feel connected at work, they generally are more motivated and productive. Today, job candidates often make it a priority to find employers who value inclusion. They want to be a part of a work culture where employees feel important.
The overall atmosphere of an inclusive workplace culture is an environment where employees feel safe, heard, respected, and accepted. All employees are welcomed regardless of age, gender, religion, culture, ethnicity, physical ability, or sexual orientation.
Proper HRM can help small businesses develop a more inclusive workplace culture, resulting in greater job satisfaction, higher productivity, lower turnover, improved employee morale, and improved innovation.
Ensure Employee Benefits Are Competitive
Employee benefits are a complicated responsibility of HR professionals. That said, by offering competitive benefits, employers are increasing the likelihood of attracting talent to their company. There are two types of benefits: the ones that are required by law and the ones that are not. It is important to note that there are exceptions to providing employee benefits based on the size of your company and the state it is based in.
Employees often select their desired benefits during onboarding. The process of choosing benefits to offer employees can be quite comprehensive, which often leads small businesses to outsource their HR to a professional employment organization (PEO).
Teaming up with a PEO can allow small businesses to have access to a wider variety of employee benefits, such as retirement plans, commuter benefits, and more. Offering more desirable employee benefits can also attract top talent and help companies retain their employees.
Keep Up with HR and Employer Compliance
HR departments are required to comply with countless employment-related local, state, and federal laws and regulations. Remaining in compliance can be a long and tedious process that requires constant attention. Small businesses are required to comply with all applicable rules that impact employment and employee relations, such as hiring, payroll, benefits, and termination.
HR software can help small businesses save time and energy by automating tasks that HR personnel would otherwise have to do themselves. Given that compliance requirements change significantly as businesses change and evolve, HR software helps to ensure that companies are kept up to date while streamlining work and diminishing mundane tasks.
Speak with New City for More Information About HR Management
Human resources software can perform a variety of functions that range from creating schedules, managing benefits, assisting with onboarding, and more. While the benefits of using HR software for large corporations may be clear, small businesses can also benefit in several ways.
A comprehensive evaluation of your organization is crucial to understand your pain points. By teaming up with an experienced employee benefits consulting firm like New City Insurance, small businesses can place greater focus on their employees and growing their company.
New City offers a wide range of services, including HR and Payroll Integration, HR Support, and Employee Benefits Compliance, among many others. Schedule a consultation to learn more about the key benefits of HR management for small companies or contact the team at New City Insurance.