Small and growing businesses have a lot on their plate with their money-making operations and ensuring the business grows. As a result, human resource management can be a lower priority than other aspects of business management more directly concerned with growth.
In the UK, there’s no legal obligation to have a HR team, certain aspects of HR are compliance essentials.
Getting the basics right
The most basic level of HR in small businesses is all about compliance. These functions have to be completed to ensure the business is operating completely above board. This includes things like robust and legal contracts with due consideration given to worker’s rights, policies and processes for things like dismissal, grievance and health and safety, and ensuring payroll functions correctly with deductions for things like tax. Finally, some data management system for GDPR compliance is essential.
While this doesn’t necessarily require a whole HR team, these are responsibilities that need to be defined, assigned and absolutely must be carried out. While anything above this is not an obligation, having more developed HR practices and processes will attract better talent to a growing business, giving them the confidence that they will be properly looked after as an employee.
How is HR in small businesses different from large companies?
Small business HR is likely to be limited in terms of resources, so a focus on getting the basic, compliance-focussed aspects correct is essential, with additional resource being used on producing resources like employee handbooks and establishing performance review processes.
Large businesses with far more resource can start to look at things like company culture, which will require more active management in a larger organisation, as well as things like employee benefits; diversity, equity and inclusion initiatives; and continuing professional development.
For small businesses, adding as much as you can to HR resource will greatly boost attractiveness to new employees, helping you grow faster and more effectively.
Outsourcing can provide HR support for small businesses that can be customised to their needs, with an expert, external HR professional or HR professionals assisting with any processes that a business can’t perform internally. They may also introduce HR software to help the internal team to manage more processes with ease.
For more information about the importance of HR in small businesses and some tips for implementing HR practices, check out our other blogs.
