For large corporations, an in house HR department is something of a no-brainer. Each year, they pay out millions in salaries and training. Hiring a few extra people to get the most out of that investment is an obvious choice.
For small business owners however, the decision can be a little harder to make. Most small companies operate on razor thin budgets. And at first glance, HR does seem like something that the owner could easily handle themselves.
Should all small business owners have a HR department? Certainly not. In the early days of an owner and three employees, a HR professional would just get in the way.
For companies with at least ten employees, however, there are some pretty good arguments why at least one of them should have HR experience.
Make Hiring Easier
Finding new employees is costly in terms of time, and costly in terms of money if you get it wrong. A HR professional can keep both these costs as low as possible. They handle the recruitment and interviews leaving the business owner to focus on other things. And because their experts at it, they ensure that you find the best person for the job.
Boost Employee Morale
One of the many responsibilities of a HR department is to simply keep employees happy. They ensure open lines of communication, they request employee feedback on a regular basis and when necessary, they assist in conflict resolution.
As anyone who’s ever employed an unhappy team will tell you, happy employees work harder. Hiring an employee is an investment. The work they put in is your return. And a solid HR professional can ensure that said return is maximized.
Reduce Employee Turnover
Happy employees are also less likely to leave. And it follows that a HR professional can reduce employee turnover.
In some ways, this is even more important for a small business than a large one. Large companies can afford the occasional walk out. Small companies cannot because it’s not uncommon for one employee to play two or three key roles.
Reduce Likelihood of Litigation
HR professionals aren’t cheap. They are however significantly cheaper than lawsuits. A HR company can’t completely protect against employee litigation. Whoever figures this out will be a millionaire.
They can however greatly reduce the odds of it occurring. Examples of things that they know, that some business owners don’t include:
• How to hire and fire legally.
• How to handle conflicts legally.
• Notices that must be displayed on premises OSHA etc.
• State and federal laws regarding employment