Running a business includes a slew of factors such as marketing, sales, product development, and more alongside trying to make a profit. With so many things happening at once, human resources tend to be the least of your priorities.
With that said, human resources are a huge part of every business, big or small. In fact, there are a few important HR basics small businesses should prioritize. Here are some questions you should ask yourself as a business owner:
- Is your compensation competitive?
- Are you ensuring the safety of your staff and resolving conflicts as effectively as possible?
- Are you doing everything you can to create a diverse and inclusive workplace for your staff?
- Are you familiar enough with the current employment laws?
A whopping 21% of business owners stated they weren’t confident in managing their HR branch. Additionally, most were unaware of the employment laws that could affect their business.
With this in mind, there are several HR basics that every business owner should know.
Recruit the Best Candidates in Human Resource Management
Your employees are the engine to your company’s ship. If you don’t have the right team working behind the scenes, your business is bound to crumble.
In many cases, recruiters will fill a position with the wrong person, costing them nearly $17,000 in lost productivity by the end of the year. Effective hiring starts with clear Job Descriptions that define the role and successfully promote the position.
In addition, employers need to prepare for the interview process accordingly. In other words, they should use consistent interview questions, since HR is responsible for defining roles and evaluating candidates. Networking also helps maintain a stream of qualified candidates. Employee referral programs can encourage Current Employees to support Employee Recruitment. Many businesses handle these HR Tasks themselves early on before adding HR Professionals or outsourcing as the Business Grows.
Background Checks should be part of the final hiring step. They should offer a competitive salary along with promising benefits for the candidate.
Why Employers Should Offer Competitive Compensation and Benefits
Through compensation and benefits benchmarking, it’s possible to attract top talent to your team and improve retention with a comprehensive package.
Compensation benchmarking is a term similar to salary benchmarking, where employers will compare the salaries and benefits between organizations within the same industry. Strong benefits plans and employee benefits also support retention.
Benefits like parental leave and health insurance can help to attract exceptional candidates to your company. Health insurance may also be legally required under certain rules. Better yet, they’re likely to stay longer when they receive attractive benefits, and comprehensive compensation plans aid in employee retention. Annual wage reviews can also help adjust pay for inflation and raises. Paid time off may be treated as earned wages in many states.
Prioritize Your Employee’s Safety
If you’re running an office-based company, there are a few risks you need to be aware of, especially for the sake of your employees. In 2015, a total of 4,836 employees lost their lives due to injuries they sustained in the workplace. Workers’ compensation insurance is mandatory for every employee.
As a business owner, your team’s safety is an important responsibility that requires you to:
- Formulate a set of rules that keeps your team safe
- Be aware of potential risks
- Ensure every employee is following the safety rules
These steps help protect workers, and effective HR practices also support a positive work environment and stronger company culture.
Frequently Measure Employee Performance
When you’ve reached the point where you’ve hired the right candidates, they’re being paid fairly, and their safety has been assessed, it’s time to evaluate their performance through performance management and performance reviews. Performance management tracks employee progress in their roles.
This process can also be helpful to employees, as you’re clarifying your expectations and objectives. Regular feedback helps align employee goals with business objectives. HR is responsible for creating the review process and documentation for evaluations. Conducting regular performance reviews helps clarify expectations and improve employee growth. Performance reviews are also essential for employee promotions and salary increases. Professional development opportunities and professional development support employee growth, engagement, and satisfaction.
Communicate Clearly and Effectively
Good communication influences the success of any business. With that said, poor communication can have a negative impact. Clear communication is a core HR goal because workplace failures are most often triggered by poor communication and a lack of collaboration. Strong hr policies and an employee handbook help communicate expectations consistently, and a well-written handbook communicates company policies clearly.
Maintaining effective communication within the workplace will prevent serious problems from arising. Clear documentation supports compliance and better decision-making, and every business should establish consistent workplace expectations through employee policies.
Keep Your Team Happy
When your employees are happy, supported through work life balance, and part of a positive work environment, they’re going to produce better work and stay with your company longer. After all, you want to avoid a high turnover rate, as implementing employee retention strategies is vital because it can be fairly costly to your business. Competitive employee benefits and supportive hr practices also help keep workers engaged.
When employees leave a company, they’re taking their knowledge and experience with them, which causes a rift in its operations. Strong employee relations and a healthy company culture also make retention easier.
Be Mindful of Labor Laws and the Employee Handbook
To run a business successfully, familiarize yourself with the current labor laws. Legal compliance means following federal, state, and local employment laws, and for small businesses, human resources also includes risk management and preventing legal issues. In short, follow the rules:
- Comply with equal opportunity laws.
- Manage payroll processing with accurate tax withholdings and employee compensation.
- Classify workers correctly, since proper employee classification is essential for tax and labor compliance.
- Give your employees the right they are entitled to under your country’s legal code.
- Maintain the employee records you are legally required to keep, since organized files support compliance and protect the business legally as part of core hr functions.
Keep three files for each employee: personal, payroll, and performance.
These records should include applications, payroll, and benefits plans, and some documents must be retained for required time periods.
Written hr policies help ensure fairness and protect against disputes, and employers must display required labor law postings. Store sensitive information securely and restrict access where appropriate.
Resolve Conflicts in the Workplace
In larger companies, managers often handle conflicts between employees. If the issues become more severe, they pass them on to the HR department. Small companies experience conflicts as well, and preventing them is easier when you have a formal employee handbook. It should also include discrimination and harassment policies.
If they don’t have an HR team, then the company’s owner is responsible for resolving them. From the standpoint of human resources, there are several things you must do to resolve conflicts successfully, including:
- Allow your employees to express their feelings.
- Identify the problem.
- Always acknowledge a conflict, never avoid it.
- Identify points of agreement between employees to find a common ground.
- Find effective solutions.
- Determine the best thing to do if the conflict goes unresolved.
After receiving it, employees should sign an acknowledgment form. Written policies help ensure fairness and help protect the business if disputes escalate.
Ensure Diversity in Your Company’s Workplace
Think of it this way: your workplace should be just as diverse as the company you live in. If this isn’t the case, take a moment to figure out why.
Then, take the right steps to solve this issue. It’s possible that you could be unconsciously excluding people based on age, gender, race, religion, or sexuality, so build hiring practices around equal opportunities. Fair hiring and inclusion practices also support a positive work environment and stronger company culture. A clear employee handbook with discrimination and harassment policies can reinforce those diversity goals. This could be hurting your business significantly. In the near future, be more mindful of your company’s level of diversity.
Take Action and Get the Right Help
Human resources involve a lot of avenues that can be difficult to navigate on your own, and the right HR tools can support core hr functions. Hiring the right help can make this ride a lot smoother, and beneficial. Software can save time and improve transparency through HR reporting and data analytics. In fact, there are online tools that will help you do it. Some also include time tracking and employee scheduling for teams in different locations.
FRIDAY Helps Small Business Manage and Pay Their Team
When it comes to managing, tracking, and paying your employees, additional help goes a long way. FRIDAY is the simplest software created to help small businesses with HR tasks such as employee onboarding and payroll processing without any paperwork involved. A structured onboarding process helps new employees become productive quickly and includes paperwork for new hires and training, while payroll processing is a core HR function that requires precision. Cloud-based tools also help current employees and teams in different locations by reducing manual follow-up, protecting sensitive information, and supporting boundaries around personal life.
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Pincus Schiff is a payroll software specialist at Friday App, where he helps businesses simplify payroll, stay compliant, and automate their workflows. He writes about payroll best practices, compliance, and the latest in workforce technology.
