Why every small business needs HR?

The heart of small businesses: Human Resources

First published on Tuesday, May 07, 2024

Last updated on Friday, Jun 07, 2024

As a small business owner, you may think HR is only a concern for large businesses with thousands of employees.

But small businesses need HR just as much, if not more, than the big guys.

That's why we're going to break down just how important HR is for every small business like yours. But first, let's clear up a common misconception.

HR, aka human resources, isn't just about paperwork or hiring and firing. Sure, those are important parts of the HR function, but it’s also so much more than that. It involves creating a positive, compliant working environment, supporting your employees, and ultimately, driving the success of your business.

small business owner helping employee on laptop

Why exactly do small businesses need HR?

If you're running a business, you're probably juggling a million different tasks at once.

From sales and marketing to operations and finance—there's always something that needs your attention. But amidst all the chaos, it's important not to overlook the importance of HR.

Think about it this way, small businesses often operate in close-knit teams. You know your team personally, you understand their strengths and weaknesses, and you genuinely care about their wellbeing. But you also need to do your part to streamline your people management.

That's where HR comes in. It helps you nurture and develop this close-knit culture by providing support, guidance, and structure. So, as you grow you have processes in place to scale sustainably.

Ten key areas where having HR support can make a big difference to your business

Compliance with employment law

While it's not the most exciting part of running a business—for Australian companies especially, it can be the most stressful.

Australia has a complex employment law landscape, and with different states and territories maintaining different laws, navigating your obligations becomes even more complex.

Having professional HR support can help you maintain compliance with evolving legislation and avoid costly fines and legal troubles.

Recruitment and onboarding

You can’t run your business without staff and finding the right people for your team isn’t always easy.

HR can help you streamline your recruitment process, making everything from identifying gaps in your workforce to writing job descriptions, conducting interviews, and onboarding new hires run smoothly.

Employee conduct

In an ideal world, misconduct, insubordination, or conflict in the workplace would never happen. Unfortunately, they are inevitable, which means how you handle it and manage employees can make all the difference.

That’s where HR comes in. HR provides support and mediation to help you have difficult conversations when they need to take place and resolve conflicts so you can maintain a positive work environment at all times.

Training and development

Investing in your employees' growth and development is key to keeping them engaged and motivated.

Ensuring that your employees have achievable goals, a path to progress, and aren’t stagnating in their positions is key to helping them achieve job satisfaction.

With HR you can identify training needs, launch a learning programme, and support career advancement opportunities. Because when your staff are motivated and given the tools they need to achieve their full potential, so does your business.

Performance management

Regular feedback and performance evaluations are essential for helping your employees grow and succeed.

HR can help you maintain a workplace culture that truly unlocks employee performance and provides guidance on how to give constructive feedback. and provide guidance on giving constructive feedback.

group of employees working at a small business

Employee benefits and payroll

Offering competitive benefits and fair pay is vital for attracting and retaining top talent. Especially in a labour shortage when you’ll be going up against other businesses to compete for top talent.

HR can help you select and manage benefit plans, as well as make sure your payroll practices are fair and in line with the law.

Culture and employee engagement

A great workplace culture is often the secret weapon that sets many successful businesses apart from their competitors.

HR helps you create a culture of teamwork, collaboration, and innovation by promoting employee engagement, which leads to an increase in staff retention.

Attendance tracking and annual leave planning

Your staff are entitled to take time off work, and there are many types of leave they are legally entitled to.

Whether they are sick, having a baby or going on holiday, effective management of attendance and annual leave is essential for maintaining operational efficiency.

HR establishes protocols for tracking employee attendance, managing leave requests, and making sure there’s enough cover to minimise disruptions to your business operations.

Policies and paperwork

Clear and comprehensive policies serve as the backbone of business governance.

HR collaborates with management to develop documentation including handbooks, contracts, policies, and procedures covering areas such as workplace conduct, ethics, and health & safety.

Plus, HR can manage the creation and maintenance of this documentation over time as your business grows. That leads us to...

Business growth

Beyond administrative functions, HR serves as a catalyst for business growth and innovation.

By fostering a culture of engagement, compliance, and continuous learning, HR grows a dynamic workforce capable of driving strategic initiatives and propelling your business to new heights.

While HR may not be the flashiest part of running a small business, it's definitely one of the most important. By investing in HR, you're investing in the success and sustainability of your business.

So, next time you're thinking about where to allocate your resources, don't overlook the power of HR. Your employees—and your bottom line—will thank you for it.

How could this look for your business?

Discover your savings with BrightHR’s payback calculator

Return on your investments

for every $1 you spend


Sources: The cost of HR documentation, recording staff lateness and absence to recording staff overtime is based on...

How BrightHR can help your small business?

No entrepreneur starts a business so they can deal with human resources. But HR plays a crucial role in the success of any small business, which means selecting the right HR solution for your business out of all the options available, can make all the difference.

Here's the good news—there's a tailored solution designed for small business owners like you. It’s HR software.

The benefits of HR software are endless, but to name a few; it streamlines your HR processes, enhances efficiency and ensures compliance with regulations. Making it the ideal choice for managing your human resources effectively.

BrightHR is more than just HR management software, it's everything you need and more—such as health & safety software and support—all in one place.

From time-saving HR tools to ensuring your business is legally sound with services helping you navigate changing legislation.

Not to mention the free value-add tools to help your business grow and elevate your status as an employer of choice—making BrightHR the ideal HR software solution for small businesses.

Discover how BrightHR can transform your people management with a FREE no-obligation demo today!

Jenny Marsden

Associate Director of Service

Share this article