Ways for an Effective HR Management in Small Businesses

May 18, 2020
Ways for an Effective HR Management in Small Businesses

[vc_row][vc_column][vc_column_text]Management of a business can be a challenge to any business owner, especially when it comes to small businesses; it’s even trickier. A proper plan for the future keeps you away from bad financial habits, which may harm your business. Being a business owner, clearly understanding the underlying processes to run a small business such as HR management, is essential.

Here are some of the ways that you should know as a small business owner for staying efficient on HR:

A Dedicated HR department is Mandatory

Most of the small businesses do not have HR capability like large enterprises. However, it is still required to build the staff with the skills, flexibility, and productivity that keeps the organization ahead of the corporate giants and other SMEs.

In general, most of the SMEs do not have a dedicated HR role. A study conducted by Chartered Institute of Personnel & Development shows that just 29% of micro-companies have fewer than ten employees, and only 47% of small businesses with 10-50 employees have just one person in an HR role for the company’s HR management.

Making someone responsible for HR

As many small companies do not have a full-time HR manager/director/officer, it doesn’t mean it cannot be progressive, ambitious, and efficient in its handling of personnel management. There are several ways to get the game point and implement best practices in HR, which includes even effective compliance management, which is more complicated than other operations on HR.

It is vital to designate a person with experience within the organization to be responsible for the entire HR during the initial stage of many small businesses. It must be someone who can make decisions, such as a partner in the firm, the managing director, or the finance director. It must become part of that concerned person’s job to make sure that the administration & development of employees is the key focus of their business.

Assumption of the right responsibilities

HR management comprises a range of responsibilities that needs to be taken care of that dedicated person, which involves legal requirements and the required functions of a business. The following are the primary areas:

  • Recruitment can be a critical part of the HR role for any business to search for and attract the right talent who fits in perfectly. Overseeing everything from the creation of job descriptions, to adverts for vacant positions, to the screening of applicants, to interviewing, to offer letters, to on-boarding of new staff.
  • While considering contracts, once the employee joins by legally accepting the terms and conditions on the job offer, most of them are legally entitled to documentation. It includes matters such as working hours, pays, over time, notice periods, sickness & holidays within two months of joining. Someone who is dedicated has to ensure this is done correctly.
  • Payroll Management is another area of HR with lots of legal requirements that need to be managed well so that pay slips, tax deductions, payment amounts, and other contributions reflect that these are done rightly and on time. This needs to be set up and run properly without any mistakes.
  • On training, it is critical to make sure employees are well trained in their job and the business operations. They may include internal processes, use of equipment, handling customers & other critical functions. Then, it is vital to provide training to improve their skills & offer qualifications to the success of the company & also for the retention of top employees.
  • It is also crucial to track the benefits of the company, which may include disability insurance, pensions, health coverage, childcare vouchers, travel loans, maternity leaves, and the necessary statutory requirements, etc.
  • While taking health & safety, an employer has the legal responsibility to ensure the safety of the employees and take the required measures to minimize the risks in the workplace. The HR ‘dedicated person’ must put together a documented health & safety policy, and make sure employees are aware of the procedure to ensure all the regulations are complied with and stay ahead of any new legislation or rules.

Key Takeaway

As a small business, you need to face many challenges initially to put everything under place. Still, a well-organized business system with the dedicated HR person who performs all the above-mentioned tasks perfectly will take your business to greater heights. Also, the critical areas like payroll management, compliance, and benefits need more focus as a small mistake may cause massive chaos to the administration.[/vc_column_text][/vc_column][/vc_row]

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