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Why You Need HR for Your Small Business

In small businesses, because there are a small number of employees HR’s role might be seen as unimportant. However, employees are one of the most important parts of any business whether there are few employees or more. Efficient management of employees in a small business would support your company’s growth and boost the performance of your employees. In a small business HR professionals can help you manage different aspects of HR.

Key HR Functions In A Small Business

  1. Hiring Process

  2. Onboarding and Employee Training

  3. Performance Management

  4. Employee Handbooks

  5. Company Culture & Employee Engagement

1. Hiring Process

According to the Forbes Human Resources Council, one of the main reasons you need HR in a small business is that HR helps you hire the best possible talent.

With a structured hiring process, an HR professional can attract and retain top talent for your business. The hiring process includes writing job descriptions, publishing job advertisements, resume and application gathering, headhunting, short-listing candidates, interviewing the candidates, making reference/background checks, and finally making job offers. HR also takes a role in the assessment process of the candidates with the application of personality tests, behavioral assessments, language proficiency tests, role-based assessments, and so on.

The HR function will also help you eliminate the risks of discrimination and inappropriate questions in the recruitment process.

2. Onboarding And Employee Training

To make sure that the top talent you hired is adapting to their new work environment, an extensive orientation program and training are essential. Onboarding starts a couple of days before the new hire’s first day. HR handles the necessary preparations that are needed for the orientation process. The orientation program is tailored for each position, and it can involve a couple of weeks to ensure that the new employee understands their role and responsibilities clearly.

HR also provides professional training for employees to support their career development. HR prepares employee development programs to improve the employees’ certain technical or soft skills for better productivity. Onboarding and employee training are crucial elements for managing employee retention.

Research by Brandon Hall Group found that companies with a strong onboarding process improve their new hire retention by 82% and productivity by over 70%.

3. Performance Management

To increase efficiency in a small business, HR takes an active role in the performance management system to monitor and guide the employees’ work performance. This system involves setting goals, performance reviews, and taking action to improve performance. For under-performing employees, HR prepares a performance improvement plan (PIP) which involves a structured road map to increase performance. The application of structured assessment models among employees eliminates the risk of discrimination and increases the consistency and accuracy of performance assessments.

According to the Forbes Human Resources Council, in the future, leaders will have to keep up with alternative performance management methods. Some of these alternative methods are thought to be:

  • Continuous feedback

  • Goals that are set in collaboration with employees

  • More frequent feedback

  • Development plans that are created from the employees' input

  • Opportunities for employees to give feedback to their managers

An HR professional can follow the recent trends in performance management and choose the best performance management method for your small business. Through performance management, the employer can identify the training needs of their employees as well.

4. Employee Handbooks

An employee handbook ensures clear communication between the employees and the management. It is an important part of the management of employees.

An employee handbook should include the company’s mission, vision, and policies as well as important rules about diversity and anti-discrimination, sexual harassment, the hiring process, and discipline. An employee handbook defines the limits of the company and the obligations of the employer along with the rights of the employees. It protects the benefits of both the employer and the employee. Employee handbooks should include clear information about the benefits, annual leave, employment and termination process, and so on. An HR professional can help you revise your handbook to make it up-to-date or can create a new employee handbook from scratch.

According to the SHRM's guide on How to Develop an Employee Handbook, 5 things an employee handbook must cover are:

  • The employer's mission statement

  • Equal employment opportunity statement

  • Contractual disclaimer and at-will employment statement (where allowed)

  • Purpose of the employee handbook

  • Background information on the company

5. Company Culture & Employee Engagement

As said by Mitch Gray the author of How to Hire and Keep Great People: “Strong, vibrant, positive company culture values their people so greatly that no one feels like just a number.”

Creating a company culture that focuses on employee development and engagement would increase the employees’ productivity and their attachment to the company. To grow as a small business, investing in your employee’s professional development would increase their performance and technical skills.

In a positive development-focused culture employees would feel supported, and this can increase their loyalty to the company. In addition to the training, company social activities can create an inspiring and stimulating workplace. Company activities would also enhance the relationship between the employees and create a positive atmosphere.

If you need HR support for your small business you can contact us at


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

How to Hire and Keep Great People by Mitch Gray

SHRM - How to Develop an Employee Handbook,background%20information%20on%20the%20company.

The True Cost of a Bad Hire - Brandon Hall Group

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