For first-time business owners, setting up shop and opening their business are the most exciting things they could do. However, a big mistake that some business owners commit is focusing too much on the opening and not enough time on the actual operation of the business.
One of the things that get overlooked is the creation of an HR department. Despite many small business owners thinking they don’t need one, it’s one of the most important aspects of any kind of business, big or small.
What is HR?
HR is short for Human Resources and is a business department that is in charge of managing employees as a company resource. This means that HR is responsible for improving the workplace in such a way that the employees operate at maximum efficiency and happiness.
Do Small Businesses Need HR?
This is important for large corporations, but is it essential for small businesses? For small businesses, HR can be crucial in keeping your small workforce cohesive and functioning while you, as the owner, can focus on expanding the business.
HR in small businesses can be leveraged to handle various aspects of the business, starting with payroll and compensation, benefits, and, most importantly, compliance with all local labor laws and regulations. As your business starts profiting and you start expanding, your small business’ HR department can be used to manage employee performance, hiring (and termination), and act as a middleman between employees and management.
As the business continues to grow, HR can also be responsible for the training of future employees and help with the organization of the company’s business processes. This is important because it ensures that your company maintains a standard of quality from the time you open to the time you expand, significantly increasing the chances of you making a profit.
How Does HR Help Small Businesses?
While it might seem like your company is too small to need it, the truth of the matter is that you need it now more than ever. For a lot of small companies, it’s often advisable to use third-party human resources consulting services to keep your overhead low while still enjoying the full benefits of an HR department.
Having an HR department for your small business allows you to dedicate time to running and expanding the business. Many small business owners wear multiple hats. While it does give you the advantage of knowing the ins-and-outs of your business, it can prevent you from actually expanding the business.
With an HR team, they can take off a lot of strain on management’s schedule and help maintain a smooth operation. But perhaps most importantly, HR can establish various business processes that can help your business expand and maintain profitability.
While it may not seem like it, small businesses will benefit greatly from having an HR department, whether in-house or via third party services. It’s something you as an owner shouldn’t overlook, and it’s something that won’t just help you survive your industry, but thrive in it.