Why You Need an HR Department
If you own a small business, you might not have a human resources department and instead perform your company’s HR functions yourself or delegate these responsibilities. However, despite the associated costs, having an HR generalist and related staff in place can be quite beneficial.
The functions of an HR department
You can outsource some HR functions, such as payroll, benefits administration, and legal compliance, to a third party, but your employees may prefer interacting with in-house HR staff more than with an outside company. Also, your business may be one client of many if you outsource your human resources functions, so you and your employees may not get all the attention you need.
Here are just some of the important tasks a human resources department can handle for you.
Talent acquisition and retention
Acquiring the best employees, which typically requires activities such as posting job openings, screening and interviewing applicants, performing background checks, and onboarding new hires, can necessitate a lot of time and effort. While you might want your managers to also participate in this process, having an HR team perform these tasks won’t unduly overload your management staff and hinder their productivity.
Payroll
Some companies may relegate the issuing of paychecks to a finance department, but a human resources department can handle other payroll-related tasks like salary increases, bonuses, and time off. Your human resources department can also help create a compensation structure for your employees and ensure that their wages are competitive within your industry so you can attract and retain the most talented employees.
Benefits administration
Your staff is one of your best resources, and employees may value their benefits, such as health insurance and retirement accounts, as much as their pay. By providing your employees with a good mix of benefits, explaining them, and managing them smoothly, HR experts can provide peace of mind for your staff and boost retention.
Employee development and training
Onboarding new employees may require a lot of time and expertise. HR can structure employee orientation, provide training that can increase productivity and reduce turnover, and ensure that your company is compliant with EEOC laws.
Company culture
A human resources department can be instrumental in fostering your desired company culture. A supportive company culture, which can consist of a shared set of positive beliefs and attitudes, can enhance retention by helping employees feel like valued members of your team. HR can help build and perpetuate company culture by recruiting candidates who align with your values and by training and nurturing employees to uphold your business’s values. For example, ReminderMedia’s HR department has created paid opportunities for its employees to perform local community service and has created an Engagement and Events Committee to foster inclusion and a sense of belonging among its employees.
Compliance
In addition to remaining compliant with EEOC laws, your company must follow other applicable laws and regulations, such as antidiscrimination, family, medical leave, and safety laws. Staying up to date and ensuring that your company is doing everything it’s obligated to do under these regulations can be a complicated task, but your HR department can simplify it by staying abreast of local, state, and federal laws and by implementing related policies.
When to create an HR department
It can be difficult to pinpoint exactly when your company needs an HR department. If your business is growing quickly, it might be a good time to consider establishing one to handle the influx; some experts suggest adding an HR specialist when you have at least ten employees.
Potential savings
While bringing in an HR generalist and possibly other human resources staff is an expense, this move can reduce your overall costs, such as those associated with the additional recruitment and training that may be needed if employees aren’t properly screened and introduced into their roles and your company culture. This is because the cost of hiring a new employee can be much more expensive than retaining an existing one, often equating to several months of an employee’s salary.
As you can see, a human resources department covers many essential functions, and if you move to establish one, you may boost your company’s performance and save time and money in the process.