Most small businesses don’t have a designated Human Resources professional on board when just starting out. But as a business grows, there comes a time when business owners must start asking themselves – do we need an HR professional? Can we justify the cost? Or can it be delayed or outsourced, with someone wearing the HR hat when necessary?
These are all perfectly reasonable questions. Many small and even some medium-sized businesses often have someone taking on HR duties as they come up. While this may work in the short-term, having a designated HR professional can be crucial to a business in the long-run.
So what makes HR so important?
- Streamline administrative processes
- Maintain company culture
- Provide ongoing employee support
- Oversee hiring
- Ensure legal compliance
1. Streamline administrative processes
There are a myriad of administrative responsibilities that a business is in charge of when they have employees, from employee onboarding and termination paperwork, to payroll taxes, to sorting out employee benefits and paid time off. It can often be complicated for someone who isn’t trained in HR, not to mention time-consuming. Why not leave it to the expert?
A designated HR professional can help you navigate the administrational minutiae so that you can focus on your business’ core functions. At the end of the day, that means peace of mind knowing that a big chunk of the administrative side of your business is taken care of.
2. Maintain Company Culture
“Corporate culture is the only sustainable competitive advantage that is completely within the control of the entrepreneur.”
– David Cummings, Co-Founder, Pardot
Strong company culture starts with strong HR. HR brings value to an organization by helping to monitor your workplace culture and support its employees. A good HR professional is able to keep tabs on the overall happiness levels of your employees, and they’ll be the first one employees will go to when something’s up (that’s why it’s so important to hire the right person for the job!).
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Just like a business monitors their external reputation via customer feedback and net promoter scores, HR does that internally for the employee and culture side of the business. By nurturing internal employees, fostering talent, and making sure your workplace is a positive environment to be in, your business will benefit in the short-term and long-term. Here are some interesting statistics relating to company culture, courtesy of Forbes:
- Highly engaged teams show 21% greater profitability
- Employees who feel their voice is heard are 4.6 times more likely to feel empowered to perform their best work
- 89% of HR leaders agree that ongoing peer feedback and check-ins are key for successful outcomes
3. Provide Ongoing Employee Support
It’s in the name – Human Resources! One of HR’s main roles is to provide ongoing support for your employees in order to maintain a content, productive workforce in the short-term and long-term.
Your HR professional should be the first point of contact for employees with any sort of work, health, personal, or conflict-related concerns. As such, it’s HR’s responsibility to keep up to date about the different types of resources and programs available to help your employees and help them navigate them. These resources provide help and support related to:
- Mental health & counselling
- Financial planning, taxes, employer matching programs
- Health & nutrition
- Victim Services
- Government aid programs
An HR professional’s expertise on available resources often prove most useful during times of uncertainty, such as a pandemic or recession. Plan proactively; a good HR professional onboard can spot and address an employee crisis before it happens.
4. Oversee hiring
“It’s about getting the best people, retaining them, nurturing a creative environment & helping to find a way to innovate.”
– Marissa Mayer, President and CEO, Yahoo
When it comes to sourcing top talent, HR functions as the face and hands of your business. As a candidate’s first line of contact with your company, HR will help them get a feel of the energy of your workplace. Conversely, HR will be able to help you find the best people to help you grow, and separate the talkers from the doers. This not only means finding the best candidate who can fulfill the job description, but also the best fit for your team, company and culture.
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In addition to sourcing talent, HR will also help in negotiating job offers and overseeing employee benefits. This helps companies get the right balance of salary and benefits to win over the most qualified candidates.
While a founder or a manager may be able to find candidates with great technical knowledge, HR will help build lasting all-star teams with employees who share the same work ethic, embody compatible core values, and help the company achieve its short-term and long-term vision.
5. Ensure legal compliance
HR professionals help businesses ensure that they comply with labour laws, from employee safety laws (applicable even if you’re a white collar business!) to anti-discrimination laws, to regulations relating to wages and hours worked. This helps businesses ensure that they avoid running afoul of the law and protect the business against legal liability that may incur down the line.
An HR professional will oversee the creation of an HR compliance checklist for the business to follow, help create a business code of conduct for its employees, and ensure that the business complies with rules and regulations.