Startups and small enterprises are all about adaptability and speed. As we will see, investing in a small business HR strategy now will make scaling your business much easier in the long run.
You do not have to hire a full-time staff. There are numerous HR technology systems on the market today that can automate much of this job for you.
Yet, human resources is critical to the success of every developing business. There’s more to it than just selecting a new email marketing solution, so let’s take a look at the function of HR in a growing firm and what technology can do for you.
Why small businesses need HR
You’re probably aware that human resources handles hiring in businesses, but there’s a lot more to it than simply letting the Applicant Tracking System run its course. Did you know that 23% of firms fail due to a lack of qualified employees?
Even if you’re evaluating hundreds of applicants, HR teams and technology can assist you in hiring the appropriate personnel. Perhaps more crucial than finding outstanding people is keeping them after you’ve recruited them.
IBM discovered that employees are 12 times more likely to resign if they do not receive the necessary training and development. According to LinkedIn’s 2018 Workplace Learning Survey, 94% of respondents said they would have stayed with their employer longer if they had invested more in their career development.
A solid HR plan includes not only rigorous onboarding, but also regular check-ins with employees to ensure they are developing their skills and see a future with your company. Whether you hire an HR director, use HR technology, or both, the most critical thing HR can do for your startup is provide legal protection.
HR provides legal protection
Big corporations with a full legal team on staff can withstand a lawsuit. Yet, for a tiny business like yours, it could be a months-long distraction at a time when undivided focus is required. HR directors will be well-versed in the relevant compliance concerns in your industry, but many HR tech solutions provide region-specific compliance training that is always up to date and easily scaleable.
Whether you want it to or not, your startup will develop a culture, so make it a good one from the start.
Culture is critical to the success of a small business, and culture is largely determined by policy. Human resources can assist you in developing and communicating policies such as dress code, benefits, time and attendance, internet use, disciplinary procedures, and holiday leave.
The first impression you make on new workers is critical to their long-term retention. You must ensure that your company’s culture and values are well-defined, enforced, and clearly communicated throughout the employee recruitment, training, and onboarding processes.
HR will assist you in integrating new employees into a positive and productive work environment. And if they see everyone in the firm upholding those principles, they’ll be more likely to pass them on to other new workers.
Benefits of HR for small businesses
Figuring out your HR now can remove a lot of the day-to-day management out of your hands, allowing you to focus on developing the business.
HR serves as a go-between, taking on day-to-day complaints and problems from employees who would otherwise have to go to executives. These busy senior directors should not be dealing with small payroll and annual leave difficulties.
HR software in a remote setting can dramatically streamline daily activities for executives by providing them with much greater transparency in managing a remote staff. Only one person booking annual vacation can start a chain of emails and calendar-checking that consumes time that neither you nor your employee can afford to waste. HR software facilitates these procedures in the same way as best-in-class calendar software does.
It is critical to ensure that your company culture is healthy for both hiring and long-term staff retention. Both are critical to your company’s long-term success. Any issues that are not addressed today will be exacerbated as the firm grows.
HR can help increase diversity
One facet of this is diversity. Many firms start by hiring from their employees’ existing networks. This is fine at first, but ultimately you’ll have a large workforce of people that look and think like the initial group. Monocultures are unstable in business, just as they are in nature, whereas varied settings are healthy and resilient.
A smart human resources director will ensure that your recruitment efforts include a diverse variety of individuals. If you are not yet ready to hire a director, several HR software packages include considerations for this. Diverse recruiting and a healthy workplace culture supported by clear regulations are critical to your company’s success as it grows, but even more so as Gen Z enters the workforce.
The most talented young individuals in the workforce have new expectations for corporate culture and diversity. Including human resources into your hiring practices can assist you in being proactive in meeting those expectations by living your organization’s stated values.
Documentation is another major benefit of HR for small organisations. By preserving records of critical operations, good documentation protects your firm. If you operate near food, for example, you must keep documentation on hand at all times in case of a health inspection.
If you need to let an employee leave, retain records of all meetings that led up to that decision. In the worst-case scenario, this will shield you from an unjust dismissal complaint.
In any event, this type of paperwork demonstrates that you are following established protocols. Compliance rules could be federal, state, or industry-specific. It could be that you’re simply following the routines you’ve established for yourself.
As the organization grows, it is more important to rely on defined guidelines rather than the judgement of any one manager. This allows everyone to make faster decisions, which is critical in fast-growing firms.
How HR can help you scale
As your firm grows, you’ll need to create additional departments, which will present some of the same challenges as beginning a new company on a smaller size. You may not know how to build a virtual call center from scratch, but job profiles, org charts, and staffing plans are all second nature to an HR director.
Human resource technology, on the other hand, enables you to standardize and replicate some of these activities. New workers may need some time to understand the ins and outs of office phone systems for small businesses. HR technology solutions enable you to create role-specific onboarding manuals once and then reuse them.
A strong talent development strategy is critical for startups and small businesses. Excellent human resources can help with this. In an early-stage startup, generalists must wear several hats and often like doing so.
If they are successful, these early-stage employees are frequently promoted to management roles, where they oversee teams of people doing what was formerly their whole job. Sure, your most skilled designer is ideally suited to be a design manager, but do they have the necessary training and experience to be the greatest manager they can be?
HR can assist you in scaling your firm by transforming well-chosen staff into fully-trained managers. They’ll be able to confidently lead their own teams and direct the training and development of their direct reports.
Small business HR strategy in the long term
As you can see, HR is critical for startups that wish to last a long time.
A small business HR plan can help you succeed by taking care of a variety of minor management issues. This is necessary so that founding members may focus on turning businesses into sustainable operations.
It’s about more than just compliance, sick leave, or dress code standards in the long run.
Whether you start with an HR director or a software solution, developing and reinforcing your HR strategy early on can help you cultivate and reinforce your vision for what a good organization looks like on a daily basis.
An HR strategy may help you develop a fantastic working culture that employees will want to be a part of from the beginning to the end. One that cherishes its in-house talent, looks after its employees, and focuses on taking their abilities to new heights.
As a result, you’ll have a greater pool of candidates to choose from during the hiring process, and your early investment in human resources and a comprehensive strategy will pay off in a virtuous cycle that will help your small business thrive.
