Southern Indiana Business September/ October 2022 | Page 6

HR MINUTE
By Anna Hinton

Does your small business need an HR department ?

If you have people working for you , you have HR needs . As a small business owner , you might be tempted to cut costs and bypass having a HR department . After all , resources are often tight , and those HR duties might be easily absorbed by the business owner or another employee .

So … does your small business really need HR ? Absolutely .
Human Resources encompasses much more than simply hiring and firing ; it ’ s a dense field that involves payroll , benefits , employee development and training , performance management , employee relations , and much more . And you must make sure you ’ re doing all of that in compliance with state and federal laws .
Once you grow to a certain size ( generally around 15 employees ), it makes sense to hire a dedicated HR professional , or outsource parts of your HR needs to help manage these business functions . There are several things that HR professionals are trained to do for a business that other employees may not be prepared to manage . If for no other reason , costly HR mistakes often have comparatively greater impacts on smaller companies . There are a few fundamental reasons why you should invest in a strong HR team .
Hiring and onboarding :
The success of any company lies with its people . A core responsibility of your HR team is finding the right candidates for critical vacant positions quickly and accurately . Meanwhile , providing strong new hire training will leave a positive impression on the employee and set them up for success .
Ensuring compliance with employment law :
The landscape for small business owners has changed significantly throughout the years . Employment laws and regulations have grown and are constantly evolving . HR ensures your business obeys all local , state , and federal employment laws . That includes handling I-9 documents that prove U . S employment eligibility , and tackling labor laws such as FLSA , ADEA , ADA , Title VII , and likewise .
Maintaining a healthy work environment :
Fostering an environment where employees feel comfortable , supported , and motivated is critical to the success of your business . An HR department creates and implements policies that build the foundation for an equitable workplace . HR professionals also resolve conflict , listen to employees ’ issues to ensure they feel heard , monitor employee satisfaction , and help to create a culture of engagement . This all contributes to the smooth running of your business and helps employees feel empowered to do their best work .
Employee retention and development :
Employee retention is another aspect that can be critical to a business ’ s success . Failing to prioritize employee retention can be expensive as the cost of replacing an employee can be up to double the employee ’ s annual salary .
In addition to operational costs , revenue , productivity , company culture , and the customer experience can be negatively impacted by constant turnover .
HR will also lead employee development programs . In collaboration with department managers and team leaders , HR develops programs to assist every employee in advancing their skills to improve company productivity and efficiency . These programs allow the team and company to achieve short and long-term goals .
The gist is you will save time and money by establishing an HR department from the onset of your business . Though , you may not necessarily need to hire a large HR department . One person may be able to handle all the HR duties of a small business . You can also consider hiring a part-time HR professional or outsourcing your HR processes to an external firm .
But make no mistake , the importance of effective human resource management is critical to your small business growth and the success of your company may very well depend on it .
Anna Hinton is the Executive Director of Human Resources at the Sellersburg campus of Ivy Tech Community College . She is a SHRM- Senior Certified Professional , with over 20 years of HR and leadership experience in academic and healthcare settings .
6 SEPTEMBER / OCTOBER 2022