6 ways Small Businesses Improve Results by Investing in HR

Not every company needs to hire an HR professional, but every company needs to invest in its HR function. Without skilled and experienced human resources advice, small business owners can make expensive mistakes. In addition, HR can offer ownership proactive guidance and recommendation on ways to improve HR processes and procedures and shape and develop a workforce that maximizes results and profits. Unfortunately, many small companies do not realize the value of HR, and only make increased investments in HR after a traumatic workplace event (i.e. employee lawsuit, employee injury, failed customer audit, etc…). It only takes one bad hire, or one bad mistake, to eliminate the “it only happens to other companies” thinking.  As we work with our clients, we find that timely and affordable fractional HR services deliver the following positive results:

  1. Improve the hiring process – hiring should go beyond the proper hiring papers and an Indeed ad.  Small businesses often rush through the hiring process.  HR can help interview applicants, conduct proper screening and design a smooth onboarding process that can better retain employees. Developing a legally defensible hiring process will help avoid unnecessary risk.
  2. Develop written employment policies – using a canned Employee Handbook causes headaches.  HR knows how to develop written employment policies that minimize risk, contain costs and engage employees.  Determine what laws apply – equal employment, non-harassment, workplace violence, 90-day introductory period should all be addressed, regardless of company size.
  3. Discipline and termination coaching – managers and supervisors don’t like to write up employees for misconduct and poor performance.  HR can engage with supervisors early in the process and help ensure problems are properly documented.  A standard, consistent process (with documentation) will allow the company to take necessary employment actions, and protect against unmerited lawsuits.
  4. Improve employee feedback and communications –  business owners and CEOs are often too busy to provide effective coaching and feedback to all employees, especially when the company grows.  HR can assist in identifying and implementing a performance management process.  Whether paper-based, or technology-aided, a workable feedback system (based on budget and capabilities of the company) can fuel employee performance, and help achieve company goals and objectives.
  5. Locate HR related resources – by staying up to date with trends, HR can proactively identify products and HR service solutions that can help the company maintain compliance, improve performance and keep up with changes in business needs.  Performance review software, benefit compliance tools, text messaging apps, HR forms, self-service benefits, employee training, etc…
  6. Knowledge of Employment laws – HR can advise the company about the laws and regulations (over 20 major federal laws) that may relate to a situation and the company.  As companies grow, so do the laws impacting operations.  Federal and state laws need to be regularly reviewed and interpreted because they frequently change.  By consulting on situations that are small, HR will prevent them from becoming big problems.

So, why is it important for your small business to invest in HR?  Research shows that companies that invest in HR and concentrate on improving HR practices are able to improve overall market value.  So, engage professional HR advice and achieve lower voluntary turnover, new hires that are better matched to business needs, employees that are more satisfied with their employment – a more valuable business.

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