The Importance of Human Resources in Small Businesses

The small number of employees in small businesses does not mean that human resources (HR) processes are insignificant. On the contrary, whether you have few or many employees, proper HR practices increase your company's growth and employee productivity.

In this article, we explain the critical functions of human resources in small businesses and how they can add value to your business.

Essential HR Functions in a Small Business

• Recruitment Process

• Orientation and Employee Training

• Performance Management

• Employee Handbooks

• Company Culture and Employee Engagement

1. Recruitment Process

According to Forbes Human Resources Council, the largest role of HR in a small business is to attract the best talent to the company.

A well-structured recruitment process includes:

• Creating job descriptions

• Publishing job advertisements

• Collecting resumes and applications

• Headhunting efforts

• Candidate interviews

• Reference checks

• Job offer process

HR professionals also measure candidates' suitability with applications such as personality tests, behavioral assessments, and language proficiency tests.
A professional HR management also protects the company's reputation by eliminating risks of discrimination.

2. Orientation and Employee Training

As important as hiring good talent is getting them properly acclimated.
The orientation process should be planned before the employee starts work and should last for several weeks to clarify their roles and responsibilities.

Another duty of HR is to provide continuous training opportunities to employees:

• Technical training

• Social skills development programs

• Personal development support

According to a study by Brandon Hall Group, strong onboarding processes increase new employee retention by 82%.

3. Performance Management

Increasing efficiency in small businesses depends on effective performance management.
An HR professional clarifies performance goals, establishes evaluation systems, and creates Performance Improvement Plans (PIP) for underperforming employees.

Future HR trends include:

• Continuous feedback culture

• Collaborative goal setting

• Employee-focused development plans

• Feedback from employees to managers

With HR's contribution, performance management prevents discrimination and ensures objectivity.

4. Employee Handbooks

An employee handbook standardizes all policies and procedures within your company.
A good handbook includes the following main topics:

• Company mission and vision

• Equal employment opportunity statement

• Employment and termination rules

• Employee rights and responsibilities

• Benefits, leaves, and social rights

As recommended by SHRM, the employee handbook should clearly protect the rights of both the employer and the employee.
HR professionals can revise these handbooks according to current regulations or create them from scratch.

5. Company Culture and Employee Engagement

As Mitch Gray, the author of the book How to Hire and Keep Great People, said: "A strong, vibrant, positive company culture values its employees so much that no one feels like just a number."

For small businesses, company culture:

• Increases employee commitment to the company

• Enhances their productivity

• Reduces turnover rates

HR professionals strengthen company culture through training and social events that support employee development. In such an environment, employees are more likely to stay committed to the company for a longer time.

Conclusion: The Role of HR in Small Businesses Determines Success

Properly managing HR processes in a small business is one of the cornerstones of growth and achieving success. With the right HR support in every step from recruitment to performance management, from company culture to employee engagement, ensures that your business is built on a solid foundation.

Do you need professional HR support for your small business?
You can reach us at info@keiken.com.tr.

Sources

• 5 Reasons Your Small Business Needs A Human Resources Professional - Forbes

• 8 HR Must Haves for Your Business to Succeed - Grasshopper Academy

• How Small Business Can Redefine Their HR Departments - Forbes

• How to Hire and Keep Great People - Mitch Gray

• Performance Management In The Future Of Work - Forbes Human Resources Council

• How to Develop an Employee Handbook - SHRM

• The True Cost of a Bad Hire - Brandon Hall Group

#humanresources #smallbusiness #performancemanagement #recruitment #orientation #companyculture #employeehandbook #hr #employeeengagement #forsmallbusinesses