What Does a Small Business Need for HR?

The Milestone Team February 23, 2024
What does a small business need for HR

Contrary to popular belief, small businesses don’t need a full-fledged internal HR department to be successful. However, someone still needs to make sure all of your essential functions get done. That’s what outsourced HR for startups is for. These services can check all of your HR boxes at a fraction of the cost of an internal department. In this blog, we cover the details of what these services offer for small businesses.

What Does HR Do in a Small Business?

What is the role of HR in a startup company? The fundamental role of HR in small business or startups is much like that of any business: to ensure that back-office functions run smoothly so that the rest of the team can shine. What do we mean when we say back office functions? Anything that falls under this list of HR for small businesses essentials:

  • Onboarding and off-boarding employees
  • Fostering a positive and productive work culture and employee/employer relations
  • Conducting hiring and exit interviews
  • Creating and distributing an employee handbook, including conduct and safety policies
  • Maintaining compliance with local, state, and federal regulations
  • Managing benefits, COBRA, 401k, leave, and unemployment claim administration
  • Administrating payroll

Your business can’t function properly (or legally) without checking all of these boxes. Without an HR team, these tasks often fall on leadership members or other team members who specialize in something else. Fortunately, outsourced HR services make creating or growing your HR team accessible, even with limited resources. Find out more about HR checklist for startups.

Why HR Is Important Even in a Small Business

HR is important even in small businesses because your people are your most valuable resource, and it takes proper management of that resource to see the greatest benefits. Just like you need an accountant to help optimize your financial management, HR professionals enable your employees to succeed. Here’s how:

  • Gathering the Right Team: HR is responsible for helping determine which roles you need filled and then taking action to recruit top talent for those roles. This includes creating job postings, communicating with candidates, performing interviews, filing contracts, and overseeing onboarding.
  • Optimizing Productivity: A big piece of HR’s job is enabling your current employees to succeed. One way of doing this is through ongoing training and learning. By providing professional development opportunities, your employees can stay current with industry trends, which ultimately makes your business more competitive.
  • Incentivizing High Effort: HR also motivates your employees to perform their best, often through professional development tracks and fine-tuning compensation and benefits packages.
  • Taking Care of “Background Noise”: Your business needs to follow the most current laws and regulations to stay in operation, but doing so takes away focus from your employees’ specialties. Fortunately, HR professionals specialize in compliance, so the rest of your team can focus on what they do best, and your business can stay in good standing with the law.

If you’ve left HR on the back burner for too long, it’s time for a change. Reach out to our team to get started.

What Small Businesses Need To Know About HR

The most important thing for small businesses to know about HR is that these responsibilities have to be done in order for your business to operate, even if you don’t have team members dedicated to completing them. You can’t operate without remaining compliant with regulations, without filling vacant roles with qualified team members, and without incentivizing top talent to stay with your organization. All of these essential tasks are part of HR and should be handled by specialists.

However, the solution doesn’t have to be building out an in-house HR department. For small businesses and lean startups, outsourced HR services are available for a fraction of the price. The best part is that these services are highly impactful, and you only have to pay for exactly what you need.

What HR Policies Should a Small Business Have?

The essential HR policies for small businesses cover:

  • Employee classifications (exempt, non-exempt, etc.)
  • Equal opportunity employment guidelines
  • Workdays and holidays
  • Paydays and pay period dates
  • Paycheck advances
  • Overtime pay
  • Break and meal periods
  • Payroll deductions
  • Employee conduct
  • Safety procedures

If you’re missing any of these HR basics for small businesses, give us a call. Our team is ready to get yours on the right track. 

How Do I Set Up an HR for a Small Company?

The best HR for a small business is one that gets that job done without stretching your resources thin. That’s why many startups and small businesses rely on third-party HR service providers to supplement some or all of their internal teams. As for setting up, that part’s easy. Just get in touch with the experts at Milestone, and we’ll take a look at what you have covered, what you need assistance with, and how we can help.

Ramp Up HR Functionality Quickly with Milestone

For small businesses and startups, the list of things you need to cover is often bigger than your budget. Fortunately, outsourced HR services can knock important items off that list while saving you money. When partnering with Milestone, you can count on:

  • Experts with experience in your industry and business stage
  • Services tailored to your needs and goals
  • Transparent pricing

Reach out today to get started.

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