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Human Resources for Small Businesses: A Guide

Top Leadership Skills

Take on the human resources related tasks of your small business with confidence by learning more about the ins and outs of HR.

As there are so many aspects to having a successfully functioning human resources department, this is no small task for those taking a first look at HR. This is especially true for those who are taking on the responsibility of starting their own small business.

From understanding your employees’ needs, to protecting the interests of those employees, there is so much that goes into the management of a human resources department. Furthermore, the way in which HR is executed for a small business is quite different from similar departments at larger companies.


Here are a few things you should know as you start the process of running the human resources department for your small business.

Expectations from Your Employees

There are a number of responsibilities and tasks that your HR department will need to be able to handle for your employees. For starters, when a new employee is brought on board, all necessary paperwork will need to be handled and filed by your HR team. Naturally, there is a level of confidentiality that will need to exist within the department, so making sure that your HR team is composed of the right individuals who are able to practice discretion is a must.

Employee benefits is another crucial element to human resources for every company. Some of the more common benefits that you might choose to make available to your workers are:

  • Stock options
  • Bonuses
  • Medical coverage
  • Childcare
  • Retirement options

Not all of these benefits are standard, so it is up to you to decide what perks you would like to offer your employees. It is a good idea to exercise as much transparency as possible so that your workers will know what they are entitled to and how they can access those benefits.

For this reason, it might make sense for you to use a system that simplifies the entire process for all those involved. The less confusion surrounding your employees’ benefits, the better your HR department will run in the long term.

Have Clearly Defined Roles For HR

Another way to provide the least amount of confusion surrounding human resources for your employees is to ensure that only those with the proper HR training are handling HR related things. There are a few different types of certifications that an HR professional can have, but all of them are attained through proper training combined with experience.

As your small business grows, it might become tempting to allow managers or others in your company to handle duties that are generally the territory of human resources. Be warned, though, that this would be a major mistake. While you might have great confidence in the ability of your managers to accomplish the tasks that fall under the umbrella of their responsibilities, you should not allow them to take on things that are out of their jurisdiction.

When those who aren’t trained and qualified HR professionals begin handling HR tasks, the only result is confusion and the mishandling of potentially confidential or sensitive employee information. If your business is at a place where the HR department is becoming overwhelmed, then it is time to search for and hire additional HR personnel. While this might pose a minor financial hit in the short term, the long-term consequences of not doing so could be detrimental.

On that point, it is important that you make it known to all your employees, including upper level management, that the HR department has jurisdiction over all employees. There can be a tendency for those in higher positions to delegate tasks to other members of their team that should really fall to HR. This should not be encouraged by any means.

Focus on Employee Training

Another key role that your HR department will need to take on, in at least a small part, is the training of new employees. As new hires come on board, it can be tempting to assume that they know more than they actually do. Furthermore, new employees might not feel very comfortable immediately asking numerous questions about a job they have just accepted.

For these and many other reasons, it is important that you have a clear training plan for new workers. Even those employees who have significant prior experience might find it difficult to acclimatize to the way that things are done at your company. Things like this can’t be overlooked in the training process.

Your end goal should be to retain employees for as long as possible. The first few months that a worker spends at a new company play a pivotal role in their comfort level there, and thus their desire to stay with that company for the long haul.

Keep Things Current

Because so much of human resources revolves around both state and federal laws, policies can change very quickly and things that were once done in a certain way will need to be addressed and altered. This is why it is vitally important that you ensure that your HR department is current and up-to-date on all the legalities involved in this area.

It is a good idea to implement certain resources to help your HR team stay current on changing legislation. You might find it necessary at some point or other to retain the services of an attorney who specializes in issues like employment law and worker’s compensation. Make sure that your HR department has access to such an attorney in case an occasion arises where legal expertise is required.

The fact of the matter is that trends and laws pertaining to HR will always change and develop. It is important that your team has the necessary resources readily available to them so that they can continue to stay on top of these changes.


About the Author


James Daniels is a freelance writer, business enthusiast, a bit of a tech buff, and an overall geek. He is also an avid reader, who can while away hours reading and knowing about the latest gadgets and tech, whilst offering views and opinions on these topics.

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