Is your Small Business HR Down in the Trenches?

Look hard, but you will not find unbiased views on the role the Human Resources Department plays in contemporary business. Some mourn but others applaud its declining influence. Even those in the middle preoccupy themselves with re-inventing the function.

Almost everything reflects a management school theory or the myopia of financial managers. The down-in-the-trenches experience has very little to offer. Theorists want to elevate and push HR to some idealistic level while financial types push aside the HR defense of values as counter-productive.
HR confuses small business.

All the reading only serves to confuse the small business owner.

• The idea that Human Resources comes with architecture presents problems. This suggests there is a mechanics to it, and that growth in a business should prompt a growth in HR. For instance, the owner might feel pressed to increase the number of employees in HR for each incremental increase in workforce number.  
  
  This horizontal rollout expands the department until other functions push back against the cost of these non-revenue producing employees. The assumption is there is no dynamic in the function, nothing organic in its performance. You can think of the physics in this narrow concept. That is, the Human Resources department grows in volume until external forces constrain its growth. At the same time, the ill-conceived reason for its growth continues until the function fails for lack of room and resources.
  
  
• Theorists envision an ideal synergy of human performance, values, and business needs. They draw analogies to picture the ideal position. They picture targets, hierarchies, and processes, but the limits of language and of human behavior proscribe their development. Terms, such as human assets, values, and capital, enrich academic writing and presentations, but often fail miserably in actual trials.
  
  
• Human Resources will sometimes over-reach as the “conscience” of the company, providing an activist advocacy for employees and lecturing the executive suite on social mores and business ethics. Human Resources professionals see mastery in this role, but this imprudently overextends its part.
  
  

All this available reading and “education” really confuses small business owners about when and what they should do about Human Resources.

Let’s start small.

• It must post current federal and state laws, usually in a poster easily purchased online.
• It can readily outsource payroll and wage taxes to a well-informed administrator and a human resources information software (HRIS) system.
• It can calendar advice from a supportive business attorney.

As the small business workforce increases, some changes must serve the increase in the volume of personnel issues. With the small business’s focus trained on performance growth, the owner has to build a defense against business damaging causes of action.

• It should create or purchase an employee manual on best policies and practices.
• It must invest in defensive training and other risk management.
• It must educate itself about labor law and vulnerabilities.
• It can delegate the administrative functions to a professional employer organization (PEO).

At some not clearly determined point in the expansion of the workforce, the small business owner wants to make a fundamental paradigm shift. At that point, where the owner has decided to grow significantly without intent to return to the status quo, the small business owner must articulate the vision of a new company and the role people will play.

• It might include making operations team-based.
• It might attach growth to employee-centric talent management.
• It might develop employees as stakeholders.
• It should include a scalable HRIS program to administer clerical and archival personnel functions.

Again, these phases are not like Russian dolls, with one doll nestled inside a larger doll, and so on. They are unique and distinct paradigms, separate and disparate mechanisms. Each needs some study and considerable planning, but without such attention, the Human Resources can stifle small business growth and potential. Take steps to not let this happen.

To start your search for an HRIS system that can grow with you, try the HRIS Selector Tool on compareHRIS.com. You will have a short list in your back pocket to easily and efficiently begin the process when you are ready.

If outsourcing to a professional employer organization appeals to you for ease of vendor management, compliance information, and decrease in administrative duties, try the PEO Matching Tool on PEOcompare.com to narrow down your search for one that’s compatible with your small business.

 

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