Top HR Tips for Small Businesses

Human resources is critical in any business, small or large. Discover these essential HR resources and best practices for your small business.

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Here's what you need to know:

  • Your HR team helps you hire and retain talent, and stay compliant with current labor laws, but a small business with limited resources faces obstacles to accomplishing these goals
  • For small business HR success, don’t delay hiring good talent and maintain your employee handbook with updated policies and laws
  • Focus on clear communication with staff members and know employment laws to ensure you're in compliance
  • Ditch the paperwork and use HR software to help you save time and money on recurring HR administration tasks

Is your organization one of the over 31 million small businesses in the United States? Small and medium-sized organizations face challenges running a smooth HR operation and staying compliant with limited time and resources. The typical HR professional working for a smaller business must wear many hats as they complete a multitude of tasks throughout the day.

An ADP study on human resources managers (HRM) reports that 82% have no certified training. Plus, only 23% say they have the resources they need to succeed. To thrive in business, you’ll need to find solutions to help improve and support routine, day-to-day HR administrative tasks.

What are the challenges of running HR in a small business?

Your HR team helps you find, hire, train, and retain talent. It helps your business operate at maximum efficiency while ensuring you stay compliant with current labor laws. Yet, a small business with limited resources faces many obstacles to accomplishing these goals.

The top challenges facing small businesses include:

  • Time-consuming hiring processes
  • Workplace safety and training new employees
  • Outdated employee handbook
  • Properly processing payroll and managing bookkeeping tasks
  • Problems managing employee benefits packages
  • Complying with current labor laws and federal regulations

Many responsibilities fall within the realm of human resources. This includes creating an employee benefits package, setting up payroll, obtaining necessary licenses and permits, documenting PTO and vacation policies, and more.

Smaller organizations are working with limited resources and don’t always have an HR department or a dedicated HR specialist. The HR duties often fall on the owner, executive assistant, or office manager.

However, ADP also reported that 81% of human resource managers feel they lack the confidence to handle basic HR tasks without making errors.

So, how does a small business with limited capacity accomplish all these important tasks?

What are the top tips for small business HR success?

There are many steps involved in hiring new staff and managing employees. If you are wondering how small businesses can improve their HR processes, you are in luck. Here is a quick checklist you can follow with a few of the best HR tips and resources for your small business.

Don’t delay hiring good talent so you don’t lose them

While the hiring and recruiting process does take time, try not to delay hiring top talent. A time-consuming hiring process could frustrate your top recruits enough to look for a position at another company.

LinkedIn’s Global Recruiting Trends reported on average time to hire metrics, noting that:

  • 17% say it takes 3-4 months.
  • 30% say it takes 30 days or less.
  • 50% say the hiring process takes 1-2 months.

Make sure HR has optimized the job description for each role to clearly define the qualifications, experience, and responsibilities. That way, when the applications start to arrive, you can quickly scan resumes and schedule initial screenings.

Maintain the employee handbook with updated policies and laws

An employee handbook is a great tool to help you communicate company procedures with your team. It should include a record of all policies, including PTO procedures and payroll processes. You’ll need to refer to your handbook in the event of an employee dispute.

Make sure you have a strategy in place to keep your employee handbook current.

If you spent the time creating an employee handbook, congratulations! But when was the last time you updated it? Policies, regulations, and labor laws change over time. Make sure you have a strategy in place to keep this document current.

Focus on clear communication with staff members

Keep the lines of communication open to encourage feedback. A lack of communication can have negative consequences on employee engagement and efficiency.

Conversely, a McKinsey Global Institute report found that companies using effective internal collaboration and communication technologies saw a 20–25% improvement in productivity.

A weekly or monthly company newsletter is a great way to let your staff know of any changes or recent developments. You can also schedule 1-on-1 meetings to provide individual performance reviews. This gives them a chance to voice their opinion or ask questions.

Know employment laws to ensure you’re in compliance

As a small business owner, you need to ensure you stay current on all federal, state, and local employment laws and regulations. From time to time, you may want to consult with an attorney that specializes in labor laws in your area.

A human resources attorney can provide legal advice and answer any questions you may have about a complicated employment issue. A law firm specializing in HR and employment can also help you draft company policies or employee contracts.

Ditch the paperwork and use a digital document management system

No one wants to spend lots of time filling out paper forms for benefits administration and other tasks. Unfortunately, every business has lots of documents to keep track of. Switching from paper to digital will help you manage this process more efficiently.

Using a document management system streamlines the onboarding process. It’s also convenient if you have a globally dispersed team. Employees no longer have to go into the office to fill out tedious paperwork. They can perform many tasks, such as updating their address, on their own.

Another benefit is you’ll free up time that was once spent filing, retrieving, and storing paper documents. This will make your HR staff more efficient as they regain countless hours once spent on routine, repetitive administrative tasks.

What’s your biggest 2022 HR challenge that you’d like to resolve

Answer to see the results

Find an HR administration solution for your small business

Small businesses face many HR administration challenges. From hiring and onboarding new talent to employee retention and conflict resolution, you need an efficient HR solution.

Choosing the right tools to help you recruit, train, and retain employees can help your business grow. Setting up HR for your small business is easy when you use an intuitive HR software platform. Using Zenefits’ all-in-one HR solution can help your HR department streamline onboarding, payroll, benefits, PTO, and more.

Your employees can use the Android or iOS app to complete HR tasks wherever they set up their office. Discover how your small business can start saving time and money on recurring HR administration tasks. Sign up for a free trial today.

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