At a minimum, the human resources department handles:
- Recruiting.
- Hiring.
- Compensation.
- Employee benefits.
- Training and development.
- Employee relations.
- Employee engagement.
- Employee retention.
- Health and safety.
- HR compliance.
To save money, many small-business owners tackle these HR and employment activities on their own, only to learn that the company is better off when they focus on revenue generation.
According to SHRM, businesses with fewer than 20 employees are better off delegating HR responsibilities to someone within the company. This is where the role of a solo HR practitioner becomes critical in small business HR, as they are tasked with balancing the broad spectrum of HR responsibilities while aligning them with the unique needs and goals of the business.
Is one HR person enough?
A 2018 report by Bloomberg Law suggests that the ideal ratio is 1.5 HR people per 100 employees. But technology and outsourcing may soon drive down the need for more HR staff members. In a small business HR department, leveraging technology and outsourcing can be a game-changer, allowing the solo HR practitioner to manage their workload more efficiently and focus on strategic aspects like employee engagement and talent development.
Where only one HR person is needed, the practitioner is often the HR manager, who does a bit of everything related to HR — except payroll, which is usually outsourced to an external provider. This versatility is a hallmark for someone running a small business HR, where the HR manager often wears multiple hats, from recruitment and training to policy development and compliance.
Do you have the right HR person?
Once you’ve established that you need only one HR person, you must secure the most qualified person for the job. In a small business’ HR, this means finding someone who has a strong foundation in HR practices and a deep understanding of the unique challenges and opportunities within a small business environment.
Ideally, you want someone who understands what goes into managing the HR function for a small business and has the necessary competencies. This includes not just expertise in HR administration but also people management.
Do you have your HR priorities straight?
Based on survey results presented at the SHRM 2019 Annual Conference & Exposition, these are the top five priorities for an HR department of one:
- Employee engagement, such as retaining high-performing employees, managing performance and fostering an energizing culture.
- Talent acquisition, such as enhancing recruitment processes and decreasing time to hire.
- Leadership, such as carrying out key HR initiatives in order to gain credibility as a strategic business partner.
- Communication, such as utilizing new-hire onboarding to break down communication silos early.
- Business acumen, such as having strong knowledge of the business in order to make informed and timely decisions. This includes an understanding of finance, sales, marketing, operations, and the business’s industry and competition.
In small business HR, these priorities take on a unique dimension as the HR practitioner often directly influences the company’s culture and operational efficiency. Tailoring these priorities to fit the scale and culture of a small business can lead to more impactful outcomes.
HR priorities typically vary by employer and can be influenced by internal and external conditions.
How can you maximize efficiency in an HR department of one?
Take advantage of resources that help managers of a small business HR decrease their workload and deliver quality HR services. For example, HR technology reduces manual labor, simplifies workforce management, enhances the employee experience and improves HR compliance. It will be necessary to build internal policies and procedures that facilitate smooth-running HR functions. For small business HR, this means creating policies that are flexible and adaptable to the dynamic nature of small businesses. These policies should not only comply with legal standards but also support the growth and development of the business and its employees.
Solo HR practitioners can benefit from joining reputable HR organizations and expanding their network — both of which are vital to connecting with other industry professionals and keeping up with HR trends.
Don’t overlook federal and state agencies, including the U.S. Department of Labor, that offer HR-related resources to new and small businesses.
Running an HR department solo, especially in a small business context, requires a blend of strategic thinking, operational efficiency, and a deep understanding of the unique needs of small businesses. By focusing on these areas, small business HR can significantly contribute to the overall success and sustainability of the business.
How Can BlueStone Services Help?
For small businesses, BlueStone Services provides specialized HR support and solutions. Please reach out for a complimentary consultation to enhance your HR efficiency and effectiveness.
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