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When a new business opens, it’s easy to get caught up in the excitement of starting something from nothing. However, you might miss out on opportunities for growth and development that come with human resources. This potentially detrimental oversight is one reason why people should be aware of how important HR is for small businesses.
The “10 benefits of effective human resource management” is a topic that can be hard to understand. This article will explain the 10 benefits of effective human resource management, and how they can help small businesses.
Human resources (HR) is the department inside a company that is in charge of “people things.” It covers a wide range of topics, from recruitment to remuneration. In a nutshell, HR personnel guarantee that your employees are employed, compensated, and productive. Choosing to embrace HR at your organization may help you improve business performance while also increasing customer happiness and profits.
Consider outsourcing your HR requirements to Bambee if you don’t have the time, temperament, or skills to concentrate on the necessity of HR management. With limitless HR consulting services beginning at $99 per month, Bambee acts as your company’s HR expert. Bambee takes care of the HR complexity so you can concentrate on what you do best: growing your company.
Pay a visit to Bambee.
So, what is the significance of human resources? Let’s have a peek at what they’re up to.
1. HR is in charge of all the paperwork.
When your company employs its first employee, you take on the role of an employer. For example, you must notify the state of any new hiring, and you must categorize personnel accurately (exempt vs nonexempt). You must also file payroll taxes and provide W-2 forms to workers at the end of the year. HR professionals are well-versed in the whys and hows of each of these standards.
New Hire Paperwork & Onboarding
It takes more than giving a new employee a seat and instructing them what to do to welcome them to your company. The government expects you to verify their permission to work in the United States and collect information for the Internal Revenue Service. HR management is crucial in this process since it encompasses much more than just paperwork. By greeting new workers, HR personnel bring value to the company, increasing the likelihood that they will remain and be productive.
Orientation & Training
While on-the-job training may make line managers wonder why HR exists, it’s the timing and coordination of onboarding and training that makes your HR staff worthwhile. HR personnel become the stewards of institutional knowledge, culture, and values as your company grows. They routinely assist new recruits in getting off to a solid start.
“Some say human resources is the most crucial component of a successful firm, and I agree. A strong HR team will be adept at both acquiring and keeping new employees. Employees will adjust to a new job and responsibilities with the support of a well-designed onboarding program, while CPD [continuing professional development] features will help them progress and feel motivated.”
Kuba Koziej, Zety Co-Founder
Processes & Procedures
The HR management role is focused on maintaining consistency and exchanging information in order to prevent organizational conflict and labor law infractions. HR professionals provide process and procedure tools to assist your company’s operations, such as paid leave plans and sick leave policies. Most HR specialists collect these papers into an employee handbook, which each team member must read and recognize yearly and upon employment. This ensures that everyone is on the same page.
Retention of Documents
Some small firms may ignore the value of human resource management when it comes to basic chores like putting up safe file systems for employee data management. Your HR department is the one who knows which payroll records must be preserved and for how long. HR professionals also guarantee adherence to confidentiality rules such as the Health Care Coverage Portability and Accountability Act (HIPAA), which mandates the safe storage of any employee medical data, such as a Family and Medical Leave Act (FMLA) request for time off to recuperate after surgery.
Consider working with Zenefits if handling the administrative side of your expanding firm is causing you stress. Zenefits electronically organizes new hire paperwork, maintains all of your employee papers online, and offers templates for employee handbooks and corporate regulations. It may also handle payroll processing and provide employee benefits. Request a free demo by filling out the form below.
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2. HR Finds & Recruits Top Talent
When it comes to finding personnel, HR is at the forefront of your company. They are aware of the finest places to advertise job openings in order to attract the top applicants. They know how to use job boards and recruitment technologies to expedite the hiring process. To avoid potential lawsuits, they also know what information should and shouldn’t be collected on a job application form. Best of all, they know how to ask the right questions to distinguish the talkers from the doers in a candidate.
Employees to Hire
One of the reasons for the importance of human resources is that a small company owner may not have the time to go out and recruit employees. HR professionals recognize the difficulties of balancing the requirement to locate the best applicant with the necessity to fill the post swiftly. They recruit applicants using a variety of channels, including job boards and social media, and they employ job descriptions and adverts that specifically target the sort of talent you’re looking for.
“Human resources is critical to my company because it allows me to connect with worldwide talent—more than half of my staff are from various countries.” I wouldn’t be able to hire overseas talent if I didn’t have an HR department. My recruiters comb job boards, LinkedIn, and social media sites for extremely qualified content writers, SEO gurus, inbound marketers, and other professionals.”
—Harsha Reddy, Co-founder & Editor-in-Chief, Small Biz Genius
Candidate Evaluation
Most HR recruiters have a sixth instinct for spotting unqualified candidates and filtering them out. They’re also less inclined to judge a candidate based on instinct rather than evidence. They utilize resume scanners, pre-employment exams, background checks, and personality evaluations to guarantee that job hopefuls and, eventually, employees, are well-matched for vacant positions.
Dealing with Job Offers
One of the primary reasons for the importance of human resources is that it will assist you in determining the appropriate Compensation and benefits package to persuade preferred job prospects to join your company. They understand how much a job should pay depending on the talents, experience, education, and work responsibilities. They’re even aware of regional pay scales and shift differences.
HR professionals are also aware of the cultural and intangible perks, such as flextime or casual Fridays, that might increase the likelihood of a candidate accepting your job offer. An accounting assistant working for a New York City insurance business, for example, will be paid more than an accounting assistant maintaining your restaurant’s records from home.
“HR is critical to your company’s success since it is at the forefront of attracting skilled individuals who will embrace your company’s culture. Hiring people that suit your business culture is crucial to success since it helps employees to onboard faster and become more productive. HR is also crucial for attracting people who will be pleased in your firm in the long run.”
—Ray Zinn, Tough Things First’s CEO
Your HR representatives create the job offers and advise you on market rates, ensuring that you don’t overspend for a vital resource or have your job offer rejected, all while ensuring that the salary and benefits satisfy the worker’s demands. This may save you money and speed up the process of filling a vital post.
HR professionals often utilize recruitment tools and application tracking systems to identify the best-matched employees and improve their process. Instead, Indeed is a free small business option. Indeed advertises job openings, keeps track of candidates throughout the interview process, and offers offer letter templates and pre-employment testing. The best part is that Indeed is completely free to use. After you’ve chosen your new recruit, you may import their information into your HR or payroll program. New users get a $50 sponsorship credit to promote available positions.
Indeed, have a look.
3. Human Resources ensures that labor laws are followed.
Many small firms don’t realize how important human resource management is until they’ve been audited, fined, or penalized. Nearly 200 federal labor regulations are enforced by the United States Department of Labor (DOL), many of which are supplemented or improved by state and municipal statutes.
Take a look at the following federal and state labor rules that apply to small enterprises. Employment rules in places like California and Hawaii may be more stringent than in other states. Human resources specialists are aware of and can assist you in complying with these crucial and often changing requirements, which is one of the reasons why they are vital.
“Our People Operations team remains on top of labor law changes that occur often in the states where we employ people, such as Hawaii and California—or in New York City, where we’re based. We, for example, cover commuting costs and give more sick leave than most states need. Online HR consultants like Bambee give a cheap option if you don’t have an in-house People Operations staff.”
—Dave Waring, Founder & CEO, Fit Small Business
Safety
A safety manager is often appointed by larger businesses, such as a food processing facility or a commercial construction company, to guarantee Occupational Safety and Health Administration (OSHA) compliance. In a small corporation, however, this responsibility rests squarely on the HR department. HR personnel in charge of human resources assist the organization in assessing possible dangers to workers and adhering to safety laws. Fines are less likely as a result of this, and your employees’ right to a safe and healthy workplace is supported.
Anti-discrimination
Discrimination has been highlighted in the news recently, ranging from sexual harassment to pay inequity. As a result, the human resources management role is critical to ensuring that your team does not discriminate against existing and/or prospective workers by mistake. During an interview, an HR staff will keep an ear to the ground for new restrictions, such as not asking about a person’s previous pay, enquiring about an applicant’s criminal past, or remarking on a person’s handicap. This might stop you from getting sued for discriminatory employment practices.
“HR professionals are at the forefront of gender diversity since they enable employee relationships and oversee recruiting procedures.” According to Fairygodboss research, the majority of men want to help women thrive in the workplace and feel that advocating for women is vital, but they are unsure of the best ways to support these efforts. HR can assist in providing the skills and resources that both women and male supporters need in order to achieve gender parity at work.”
—Romy Newman, President & Co-founder, Fairygodboss
Ordinances enacted locally
Your HR specialist will examine official compliance paperwork and may attend HR meetings to learn about new laws and regulations that impact your employees. Is your municipality or state enforcing a no-texting-while-driving regulation, and if so, does that indicate your internal communications policy has to change? Has your state, like many others, recently enacted paid sick leave legislation? Is the minimum wage in your community greater than the state or federal minimum wage?
Understanding how labor rules influence small companies is one of the challenges they confront. Many novice employer mistakes may be avoided by having an HR adviser on fast dial. For just $99 per month, Bambee offers an unlimited phone consulting service. Visit get started, go to the website.
Pay a visit to Bambee.
4. HR Keeps Workers Happy & Productive
While it may seem that HR’s job is all about paperwork, after the legal requirements are met, HR specialists provide value by assisting in the monitoring of your workplace culture and providing assistance to your employees. They keep track of your human assets’ happiness in the same way that an aviation mechanic “listens” to discover and avoid possible issues. Why? Because they know that happier, more engaged people are more productive at work.
Turnover Reduction
Turnover of employees is almost never a positive thing. It indicates that employees are departing your organization, which is expensive. Employee turnover costs roughly $4,000 per worker, according to data from the University of California, Berkeley, with manual and blue collar employees costing around $2,000 and managers spending closer to $7,000.
Some employees leave voluntarily for valid reasons like a spouse’s job requiring them to move out of state. Others leave involuntarily when you realize the employee is not up to the task and let them go. Through great hiring and engagement of existing workers, your HR staff adds value by Turnover Reduction in your business, saving on the cost of finding and training replacement workers.
Burnout Prevention
Burnout is one of the reasons outstanding achievers quit a company. They work hard and produce excellent results, and you continue to promote them and reward them with incentives. The cycle repeats again until the staff get exhausted. This may result in poor performance, stress, and a high rate of turnover. HR can assist you avoid losing your finest workers by providing a sounding board for them and their supervisors, as well as stress-reduction measures.
“You have a lot of power as a small company owner over how jobs are planned, as well as when and by whom duties are given. When considering how a job may be adjusted to improve work-life balance, examine the individual and their circumstances. According to our findings, having an HR function may be highly beneficial in keeping a pulse on workers and keeping an eye out for burnout and emotional tiredness signs in employees.”
—Ronda Smith, Ph.D., Ball State University Professor
As part of its human resource management system (HRIS) software and library of HR tools, Zenefits offers resources to small businesses like templates for gathering employee engagement feedback. It can help keep track of statistics on staff retention and turnover. Zenefits can assist you in managing employee performance talks so that you can keep your employees engaged and remain on top of any concerns that arise. Register for a free Zenefits demo.
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5. Human Resources Fosters a Positive Work Environment
Customer feedback and net promoter ratings are most likely used by your company to keep track of its reputation. You want your consumers to return back, purchase more, and tell their friends about your business. On the personnel and culture side of your organization, HR provides this monitoring for you. What do workers want to see more of and what do they want to see less of? HR is on the lookout for qualities that will make your organization a wonderful place to work.
Alignment of objectives
Workers who think their job counts and that they are “part of the team” are one of the key drivers of employee engagement. HR plays a key role in ensuring that workers feel like they belong and are appreciated at all stages of their careers. It also guarantees that managers have the tools they need to assist their employees understand how their work contributes to the company’s goals.
6. HR Manages & Tracks Employee Productivity
Let’s be honest about it. You don’t recruit staff only for the purpose of making them happy. You employ somebody to do a task. Although it’s plain logic that if they’re pleased, they’ll perform a better job. Human resources management is important beyond employee engagement since it provides several levers for tracking and improving staff productivity.
Compensation
Warning: more money does not equal greater productivity. It’s just one of the many tools that an HR professional can provide to your company. HR experts, especially those with compensation management skills, can assist you in determining reasonable pay rates to meet your pay equality objectives. They understand how to develop a compensation and benefit package that will best inspire workers. Hourly compensation, salaried pay, pay timing, and structured bonuses and incentives are all examples.
“We’ve had a lot of workers throughout the years, and we’ve had to deal with payroll inequities before.” We addressed this problem by establishing a career path for specific occupations. Employees that do the same role in our firm are paid the same salary unless they have worked for our company for two years or longer. Consider that whomever was employed first may earn a different wage when comparing pay for two workers. Our wage amounts are also varied by geographic region. For offices that are more than 150 kilometers apart, we accept wage discrepancies.”
—Gustavo Carvalho, Copahost’s Chief Marketing Officer
Benefits
Employees in the United States are used to receiving perks in addition to their wages, thus not giving these advantages might reduce their motivation and productivity. Paid time off, including as vacations, a vehicle allowance, employer-sponsored Health Care Coverage, or a monthly pizza party are all examples of benefits. HR professionals can assist you in determining what your workers desire and matching it to your benefit budget.
Health Care Coverage
Once your business crosses the full-time equivalent (FTE) threshold of 50 employees, you’ll find it’s your HR experts who have expertise in setting up and managing an employee benefits program. They understand what it takes to be compliant with the Affordable Care Act (ACA). However, they can also help you get Health Care Coverage even if you run a much smaller firm—by leveraging their expertise in working with small business benefits providers like Zenefits.
Software Tools & Productivity Apps
HR automation techniques ranging from electronic time clocks to peer feedback applications have sprung out as a result of the complexity of human resources. Your HR staff can assist you in determining which tools are appropriate for your company based on pricing and functionality, and then assist you in setting up and using those tools, including giving instructions, training, and support to both managers and workers.
7. Human Resources Aids Business Competitiveness
“People are our most important asset,” as the saying goes, is only true if your team members’ fundamental needs are addressed. If you don’t, people will be your fastest way to failure, and you’ll start exhibiting poisonous tendencies at work. Human resources are crucial since HR personnel are in charge of overseeing everything that contributes to the optimization and productivity of your human resources.
“In my perspective, human resources determines whether a firm succeeds or fails. Because a firm is only as strong as its weakest link, HR plays a critical role. Many firms, I believe, fail as a result of poor HR practices, beginning with recruiting, since people are the cornerstone of any business.
“Aside from hiring, HR must ensure that workers are content, motivated, and at ease in the workplace. Successful businesses invest in human resources and ensure that all of their workers’ requirements are addressed, particularly in terms of motivation; it’s critical for HR to analyze individuals and understand what makes them tick. Employee retention is closely linked to HR, since employee happiness is a continuous process.”
—Igor Mitic, Fortunly Co-Founder
Strategy
HR is often tasked with assisting a company in articulating and executing its strategy. That may help you codify your company’s goal, vision, and values, but the actual value of human resources management is that it embeds the organization’s philosophy across the employment lifecycle—from job descriptions to job advertising, employee handbooks, orientation, and performance measurements. Through personnel, HR aids in the execution of the company’s plan.
HR is the company’s human resources department.
Human resource management is important since it encompasses everything that has to do with people. It does it in a manner that complies with labor laws, potentially saving you money in fines and penalties. It may both make and save you money (for example, by reducing turnover or lowering the cost of hiring). Customers will be more loyal if your employees are happy, and your company will be more lucrative and expand.
Conclusion
As our experts remind us, human resources may be a person managing workplace compliance, department centered on people and company values, or mindset that focuses on all the human aspects of your business from employee benefits to peer engagement. Improving your human resources function can translate to Conclusion profits by reducing your turnover cost, improving employee productivity, and lowering your risk of employment lawsuits.
Are you ready to automate your whole HR process, from recruiting to payroll? Zenefits may help you save time and money by taking care of administrative paperwork and complying with labor laws. Overtime and state minimum pay rates, for example, are included into the program. In addition to self-service software, Zenefits provides benefits in all 50 states and may provide HR and payroll consulting services. Register for a free Zenefits demo.
Visit Zenefits for more information. for more information. for more information.
Human resources is important for small businesses, because they are the key to success. Without human resources, a company can’t grow and expand. They need to hire people in order to make money and keep growing. Reference: why small companies and entrepreneurs should implement hrm.
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