10 Best HR Tips For Small Businesses
A small business is its own ecosystem.
Everyone plays their specific role, they are complexly interconnected, and they constantly rely on each other to survive. And, as with any ecosystem, if one element is not performing optimally, everyone is impacted. Whereas large issues are easy for most managers to spot, before these issues became noticeable, there were likely many small indicators of disruption, and, had they been identified, these tiny blips could have been addressed before too much lasting damage was done.
The backbone of any successful business is the way it treats its people. Time and time again, data shows us that things like workplace transparency, employee morale, and respectful company culture is what attracts and retains the kind of employees that small businesses need to thrive. Below are 10 tips to keep in mind when approaching human resource best practices for your small business.
1. KNOW THE LAW
There are numerous employment laws that every small business owner must be aware of. These laws can loosely be placed into five categories: workplace discrimination laws, wage and hour laws, employee benefits laws, immigration laws, and workplace safety laws. It can feel like a lot to sort through, but understanding how to present and enact these laws with your employees is a non-negotiable part of managing a small business, seeing as failure to comply with these laws can lead to disgruntled employees and astronomical legal fees.
2. PAY YOUR EMPLOYEES ON TIME AND HAVE A SOLID PAYROLL SYSTEM
Of course you want your employees to do their best work because they love what they are doing, but the reality is that financial compensation plays a big role in why people show up for work every day. It is essential that you pay your employees on time. Not doing so will not only result in low worker morale, it may jeopardize the health of both your employees and their families, whose needs are met through those regular paychecks. Paying your workers on time, (and before you pay yourself), is not only the decent thing to do; it likely means that you'll pay less in taxes, penalties, and legal fees. In order to ensure that payment happens smoothly, have a payroll system with a proven track record and make sure the payroll specialist is well-trained on how to use it.
3. UNDERSTAND HR COMPLIANCE
HR compliance, which is the set of procedures that govern, among other things, the retention of employee files and the collection of tax data, is daunting and complicated, but it is worth learning and establishing early on to avoid paying a consultant to correct errors later. In extreme cases of non-compliance, small businesses might be audited and/or required to pay fines and penalties, and not knowing how to attain compliance is never a valid excuse.
4. HIRE THE BEST
Avoid the pitfalls of hiring the first person who applies for the job, especially if they don't seem quite right for the position. Hold out for the best possible candidate you can find. In fact, many successful managers tout the benefits of employing people more talented and more driven than they, themselves, are. If you take the time to hire someone with a proven track record who will take the initiative to go above and beyond, chances are you won't be rehiring for the same position three or six months later when your original hire has proven unsuccessful. What's more, employee turnover is not only time-consuming; it is also extremely costly. According to the Work Institute, every employee departure costs about one-third of that worker's annual earnings, including expenses such as recruiter fees, temporary replacement workers, and lost productivity.
5. PREPARE NEW HIRES FOR SUCCESS
Once you've hired the absolute best person for the job, set them up for success by having a comprehensive on-boarding and training plan in place. Clearly outline what tasks and duties you expect a new hire to take on in their first week, first month, three months in, six months in, and a year in. Then, make sure they are supported in these goals with regular trainings and check-ins. A recent survey found that 40% of employees leave a job within the first year if they receive poor training. Don't go to all the effort of hiring amazing talent, just to lose them by not providing them with adequate resources to succeed.
6. ESTABLISH CLEAR POLICIES AND PROCEDURE
A small business without an employee handbook is like a country without a constitution. Where will your employees learn about the policies and procedures they must follow? If you don't have an employee handbook, start drafting one today. It will set clear expectations around things like payroll, benefits, time off, promotions, company culture, and employee conduct.
7. MAKE PERFORMANCE MANAGEMENT A TOP PRIORITY
Performance management is a fancy term for the ongoing process of communication that happens between an employee and their manager. Performance management is a continuous process, and should not be framed as a once-a-year activity. Regular check-ins with employees are the lifeblood of a small business. They give the manager the opportunity to clarify expectations, and they give employees the opportunity to set goals and receive feedback and coaching. When performance management is conducted well, both parties leave feeling understood and supported.
8. COMMUNICATE OFTEN
While regular check-ins are vital, don't make these the only way you communicate with your employees. People naturally want to feel "in the know," and quick, direct, and consistent communication will help your employees feel valued, informed, and integral to your success. Regular communication also mitigates HR risks by promoting transparency and avoiding situations where people feel blindsided by information that appears to come "out of the blue." Lastly, two-way communication empowers employees to share their ideas, and express any concerns or anxieties they have before these feelings become a problem that needs more time-consuming intervention
9. BUILD A COMPANY CULTURE
Having an open, honest, respectful, and fun company culture will not only make it easier for you to recruit the best talent; it will also increase engagement, productivity, and performance. More so now than ever before, employees want a workplace where they can show up as their authentic selves. Use trainings to build the type of culture where employees feel encouraged to speak up and actively support each other. Specifically define terms that often remain vague, such as "professionalism," "civility," and "mutualism." Lastly, build employee social time into each work week. It can normally be something simple like a happy hour, but a few times a year consider splurging on an outing that will double as team-building: bowling, line dancing lessons, or a picnic at a local park. Employee friendships not only boost individual mental and physical health; they also lead to workers who are more generous with their time and more constructive with their feedback, so do everything in your power to foster strong bonds among your workers.
10. HIRE A PROFESSIONAL
If all of this seems like a lot, that's because it is. The average small business spends between 18 and 40 hours a month on HR-related tasks. HR legal compliance alone can take weeks, months, or even years to master, and the HR novice might make unintentional and costly mistakes. Add this to the full-time job of running a small business, and you've got a recipe for one stressed-out manager, and there is no way that this stress will not trickle down to your employees and negatively impact company culture.
The truth is, you're an expert on whatever your small business does, but you're probably not an HR expert. There is absolutely no shame in asking for help and hiring an HR Consultant many of whom specialize specifically in helping small businesses establish the best HR practices possible. Hiring a professional will give you peace of mind that your small business is HR compliant, and will also give you the time needed to grow and sustain your business.
To learn how you might streamline your HR processes, consider scheduling a free consultation with the HR Doc. Contact us today to learn more about the services we offer, all geared towards helping you build the happiest, healthiest, and most productive workplace possible.
