Importance of HR in Small Business

HR in Small Business

Human resource is a very important component in the functioning of any organisation. Good and efficient employees can take any business to dizzying heights and deliver results optimally. In large companies and organisations, one or two employees that do not deliver may go unnoticed. But not so in small businesses where an under producing staff can adversely affect the overall functioning. It is therefore crucial that the right employee for a vacancy is selected after careful thought and due diligence. The facilitator in this case is of course the HR manager who has the onerous task of making sure that the recruited employee is committed, loyal and well suited for the job.

However, the role of an HR executive in small businesses goes much beyond the recruitment process. Here are some of the more important aspects –

  • Compliance with rules and regulations – One of the primary responsibilities of an HR manager is ensuring that all statutory rules and regulations relevant to employee relationships are complied with – from hiring to safety issues to compliance with labour laws. As per rules, even small businesses with even 10 employees have to follow certain regulations in this regard.
  • Optimised hiring practices – A good employee is one that has the required skills and knowledge to blend in perfectly with the work requirements and culture of the organisation. An HR manager thus has to ensure the smooth working of the business and make sure that matching staff is in place. It requires intense planning and a good HR policy. This is because the recruitment process is not easy. Advertisements have to be given in the print media, preliminary screening of applicants has to be made and the final round of interviews has to be conducted. The problem arises when vacancies have to be filled at short notice. With foresight, an HR manager can ensure that the small business runs smoothly without any hitch.
  • Training and development – This is one aspect that is critical for any organisation. It is more so for small businesses with limited employees at their disposal. Every employee has to be trained to handle a wide range of activities, often outside their area of expertise. Only specific cross training can make sure that employees are able to cover more than one job function. The focus of an HR manager should also be to have policies in place that are also effective.

This training can take various forms. The most common is having senior executives conduct programs related to their specialisations. The other is having training programs devised by external agencies. Here the name of Shannon Pigram comes to mind. He is a multi-talented HR executive who specialises in employee engagement, training programs and talent management. It is people like him who can be of immense help in creating effective training courses.

  • Employee Recognition – Employee recognition is a huge motivating factor but sadly, small businesses do not have the required budget to do full justice to it. It is here that the position of an HR manager becomes very important. It is he/she who has to keep a tab on employee performance and work out a system of rewards. Employees’ preferences have to be evaluated and programs and activities created that will meet those needs. Only then can such problems as absenteeism and low productivity be addressed, both factors that contribute to high staffing costs. Another employee recognition strategy is to highlight performance on social media platforms such as Instagram or Pinterest and on the business website.
  • Welfare measures – A few welfare measures are statutory, others are at the sole discretion of the management. It is in the second instance that a HR executive has a crucial part to play. An exact balance has to be struck and welfare measures initiated that will not only meet employee expectations but will also be within the limited budget of a small business.

These are some of the roles and functions of an HR manager of a small business.