HR Support for Small Business

Hiring employees is one of the most exciting but most challenging milestones that a small business will face when growing. A founder will need to define a job description and pay rate, then publicize the position. After screening and interviewing candidates, he or she will also need to negotiate an offer and set up a workstation, technology, and payroll. Training and onboarding can be time-consuming to design and implement for the first time, and processes that have been owned by one employee or passed on orally will need to be documented. 

Not to mention, there are legal guidelines that inform each one of these processes. There is also important documentation at each step, some of which need to be stored securely with access hierarchy. Employment law and payroll differs from state to state. A misstep in the process could mean your company misses out on top talent or runs afoul of employment law, racking up costly fines. 

Managing these functions may have been possible by a founder or single employee at first, but these functions grow increasingly difficult at scale or in busy seasons, which is why many companies use partners to outsource HR. 

What does HR do in a small business?

What does HR do in a small business? Here are several of the most critical functions of HR in a small business, according to HRMS World:

1. Maintaining employee records
2. Managing payroll and benefits
3. Managing time tracking and attendance
4. Recruitment & staffing, hiring, and onboarding
5. Following labor and safety regulations
6. Employee relations

Some HR functions like internal communications are much more straightforward at a small business than at a large, matrixed organization. At the most basic level, employees need to be paid promptly, have access to any promised benefits, have a safe working environment, and have a clear point of contact for any onboarding or HR-related questions. And all of this needs to be done in compliance with the latest employment law for each state that employees are hired in. 

What are the important HR requirements for a small business?

The HR services of a small business will largely depend on the size and industry of the company. For instance, health and safety will be a major concern in some industries where physical labor is involved, while this need will be minimized for office workers or a remote workforce. 

Another important consideration for small businesses is how to follow all of the relevant labor laws and regulations for their local area. Companies must comply with federal laws such as the Civil Rights Act, Equal Pay Act, and Americans with Disabilities Act, in addition to state and local laws. State and local laws often differ, and many business owners struggle to manage the differences as they transition to a remote workforce. Small businesses are exempted from many regulations mandated for larger businesses, but they can easily fall out of compliance if they grow larger than 50 employees and don’t have expert HR advice to keep them on track. 

Yes, compliance is critical for a functioning business of any size, as are the other human resources functions in the list above. Managing employees through their full life cycle starts at employee #1. 

Do small companies outsource HR? 

Some small businesses choose to keep their HR functions in house, dedicating either a part-time or full-time employee to HR functions. Many businesses using this option will rely on several tools and technologies to make their jobs easier. It can also be possible to spread HR responsibilities out between several employees, including the supervisor, but this is not best practice due to inevitable compliance issues. Other businesses find that outsourcing HR through a trusted vendor is the best solution for them. 

Should a small business outsource HR services? There are many factors for businesses to consider in whether or not to outsource HR functions. Partnering with an HR vendor can offer a broader range of expertise than a single employee can and avoids a bottleneck if that one employee is sick or on vacation. In the case when there is not a full-time hire, outsourcing HR can free up time for a founder or other employees to devote to customer service, operations, and business development that are critical to continued growth. 

HR outsourcing companies for small businesses can provide either a limited number of services like payroll and benefits or can partner with companies as a comprehensive provider for employee recruitment, engagement and strategic HR initiatives. At the end of the day, your approach to HR support in your small business will have an impact on your ability to retain and recruit talent which ultimately impacts your success and bottom line. Milestone brings a refreshingly forward approach to outsourcing HR and accounting with a team of experts that has your back. No matter your business size, Milestone believes you should have the expertise and resources worthy of your entrepreneurial journey. Highly trained, specialized, and well equipped with the resources to help your business, contact Milestone to learn how we work with entrepreneurs and growing businesses to achieve the best outsourcing results.