Human Resources for Small Business Owners
Small business owners typically do it. You’re the marketer, the accountant, and when it’s time to hire and grow – you’re the HR department.
We’ve gathered the top ten tips you’ll want to keep in mind as you start and grow your business – even if you haven’t hired yet.
1. Know the Law
It’s important that you understand the state and federal laws that impact your employees. Get clarity upfront about safety and security, leave times, hiring practices, required benefits, and more.
The Federal Employee Handbook is a good place to start.
2. Keep Proper Documentation of Personnel Files
One of the smartest HR moves a small business can make is to digitize and centralize personnel files.
Too many companies make the mistake of getting by with paper files and various spreadsheets. Creating a centralized, digital HR database creates a foundation for growth that you’ll need when it’s time to expand your team.
3. Avoid Overtime Violations
Small business owners often do everything themselves, including HR and payroll. Stay aware of how overtime accumulates, make sure employees are classified correctly, track time for hourly employees, and pay employees for all working time.
Penalties for violating overtime laws can be costly. Stick to the rules and keep accurate records to protect yourself and your business.
4. Have a Clear Anti-Harassment Policy in Place
As a business owner it’s your responsibility to make sure your workplace doesn’t become a hostile environment. The Equal Opportunity Commission estimates that U.S. companies have paid out more than $295 million in sexual harassment cases over the last seven years.
Consider conducting climate surveys, create a clear process on how to report violations, and implement swift consequences for harassers.
5. Foster an Intentional Company Culture
Creating and maintaining a great company culture is hard work. One of the most important ingredients? Employee engagement.
Employees are most engaged when they have a strong sense of purpose. Define your company’s vision and align goals with this vision. It’s also important to communicate the vision and goals regularly. Each person at your company should know the elevator pitch to share your company’s vision and values.
6. Create an Onboarding Process
Small businesses often think they’re too small to have a formal onboarding process. In reality, a streamlined and electronic onboarding can help level the recruitment playing field between small and large companies.
Employees form critical impressions from their pre-hire time through their first six months. These impressions then impact retention and performance in their new role.
A clear onboarding process can set each new employee up for success by helping them navigate an organization and understand what it takes to thrive in their new position. A comprehensive onboarding process should communicate cultural norms, clarify expectations for performance, and help improve internal communications and relationships. And it’s all the better if onboarding can be completed through automated, paperless software.
7. Create and Maintain an Employee Handbook
Even if your business is small, you should begin crafting an employee handbook and company policies on day one. You’ll want to update this document regularly in order to keep it current as your business grows. The handbook will also be important to share with new hires during their onboarding.
By investing in company policies, you’re investing in your team members and creating a policy compliant workspace for everyone.
8. Leverage Technology
It’s important to incorporate the right technology tools into your employees’ workflows.
Productivity and organizational tools like Basecamp, Slack, and Trello help employees collaborate and manage projects. For improved employee engagement, there are survey tools that can help you tap into how employees are feeling about their overall work experience.
Providing employees with wellbeing apps – like Limeaid – is another way to show you care about your team beyond their work-related contributions to the company.
9. Don’t Delay Performance Reviews
Data shows that waiting until the end of the year to discuss an employee’s performance – whether good or bad – is not only ineffective but leads to employee dissatisfaction and increased turnover.
When meeting with employees, provide constructive feedback and be prepared to include suggestions for future improvement. Discuss upcoming goals (set by both you and your employee) and learn what resources the employee might need to be successful and motivated.
Quarterly performance evaluations can help implement a culture of constant learning, development, and improvement where the performance evaluation becomes a dialogue of accomplished goals rather than seen as unattainable.
10. Always Be Recruiting
Small businesses should always be recruiting talent. The best time to think about adding someone to your team is when it’s not imperative that you have that spot filled today.
If you’re able to take your time and select the right talent you want on your team for the long term, you’re setting yourself up for a much smoother ride.
Get Ready to Grow
If you’re ready to grow, we’re ready to help. Our team of dedicated small business consultants work with business owners every day to start and grow businesses.
Learn more about the essential HR functions for small business owners at upcoming training events, including: