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5 Simple HR Tips for Small Businesses

A common misconception in the corporate world is that small businesses face only minor challenges when it comes to Human Resources. In actuality, the smaller the business the more challenging it can be to hire a team, create and maintain a company culture, and comply with ever-changing laws and regulations.

No matter how many employees a company has, careful planning and execution is critical when it comes to organizing human assets. Here are five key things to keep in mind when running your small business.

1. Importance of Knowing, Understanding, and Following Regulations and Law
From the very first day an employee is hired, there exists an often-confusing set of laws and regulations that cover everything from payroll to employee discrimination and harassment to termination and everything in between. HR professionals with questions can and should seek advice from an attorney when necessary. Also, certain software programs such as Microsoft Small Business Accounting and Intuit QuickBooks offer guidelines and templates that can help identify common legal situations.

2. Keeping Files Organized and Confidential Is Essential
Whether a company employs two employees or 200,000, it’s important to keep employee files organized and confidential. Ideally there should be two files for each employee: a personnel file and a confidential file.

Items to include in the personnel file are things like the employee’s resume and original job application, salary records, transfers, job evaluations, and any disciplinary actions. Items to include in the confidential file are medical records, leave requests, I-9 forms, payroll records, and reference checks. The items in this folder should only be revealed on a need-to-know basis.

3. Staying Up to Date and Timely with Payroll
No HR professional likes the idea of disgruntled employees, not to mention irritated accountants come tax time, so it’s a great idea to stay thoroughly organized with payroll systems and make sure to hand out paychecks on a consistent basis, at the same time each period. Timesheets can help keep track of vacations and sick time, and utilizing business management software can help free up time, which can then be devoted to other necessary HR duties.

4. Creating an Employee Manual
New employees should never be expected to know how a company works, no matter how much experience they have in the industry. A comprehensive handbook not only sets forth the company’s policies and expectations, it can also help create a common culture and aid in avoiding unnecessary legal actions.

5. Motivating and Encouraging Employees
Employees can be motivated in many different ways. One of the most effective methods of motivation has been found to be creating an interesting work environment that offers flexible schedules and incentivized recognition programs. While financial rewards typically have their place, small businesses would benefit from those nonfinancial rewards that cultivate excitement, advancement, and loyalty.

There is no denying the need for Human Resources within the small business environment. In fact, some might argue the function of HR becomes even more impactful with fewer employees, as every decision, policy, and strategy counts that much more.

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