Strategic HR

The Function of HR in Small Business Organizations

By December 24, 2020 No Comments

The Functions of HR in Small Business Organizations

The functions of HR are equally important in small businesses as in large businesses. Operating a business can come with many challenges, all of which could easily lead to serious issues if not properly managed. Fortunately, for many industries, the human resources (HR) department can help mitigate this risk, allowing a company to remain compliant while also ensuring staff happiness. However, while an HR department performs several essential tasks for an organization, its role can dramatically vary in a small business compared to a larger one.

Ensuring Rules are Followed

No matter the organization’s size, having a knowledgeable HR department in place is key to making sure the necessary laws and policies are upheld. Even the smallest of the small businesses — whether the organization has just a handful of employees or employ dozens of staff — adhere to the many legal regulations that remain important. Failure for a company to adhere to the Fair Labor Standards Act (FLSA), the Equal Pay Act, or the Immigration Reform & Control Act can quickly spell disaster for a company. While both small and large organizations can suffer repercussions for failing to comply, this could be nothing short of devastating for a smaller business.

Avoiding Illegal Hiring Practices

Finding the perfect employee to bring into your small business is no easy feat, but your HR department can help streamline the process allow for easier hiring and onboarding. They can help scout and recruit new hires, allowing a company to secure the perfect candidate for an opening. Not only does a company need to find the right individual to hire, but they also need to make sure they avoid somehow inadvertently veering into illegal hiring practices. When running a small business organization, one cannot be too careful. An innocent comment or remark can suddenly become grounds for a discrimination suit.

Verifying Staff are Trained

There is almost always a period of training for every new hire following their start date, which HR oversees. For larger businesses with many employees, a variety of tasks can be delegated across the team. However, when a business has less staff, this can underscore the importance of ensuring proper training. In smaller businesses, it’s vital to make sure staff not only can perform the duties of their job, but they’re also cross-trained to assist in other departments in the event that such a need arises.

Seeing to Job Satisfaction

Larger businesses can often see higher levels of job turnover. For every new hire, they may find they are bidding farewell to a different staff member. While this can be fairly typical in a bigger organization, smaller businesses can find themselves facing hardship if they lose an employee or two. With a strong HR department in place, though, a small business can help minimize that turnover by not only seeing that staff are compensated for their work and provided with benefits but that they also feel valued and recognized. Sometimes, a simple “thank you” for a job well done can make all the difference in employee retention.

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Reaching a Common Goal – Understanding the true Functions of HR

Whether an organization has just a dozen staff or thousands of employees across several states, an HR department’s objective remains largely similar. Seeing that a company remains compliant — while also helping to optimize it by hiring but retaining valuable employees — is often an end goal for HR. Nevertheless, while these objectives are quite similar in large businesses and smaller ones, their approach can vary. At the end of the day, though, a company’s HR department can make or break a business. Perhaps a poorly operated HR in a larger company can go unnoticed for long, but any shortcomings can be glaring in a small business organization. Indeed, the value of a knowledgeable human resources department for a small business is notable and simply cannot be overstated.

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