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 might be thinking, "HR? That's for large businesses with thousands of employees, right?" Wrong. 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 for you. 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's about creating a positive work environment, supporting your employees, and ultimately, driving the success of your business.

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. Now let's get into the good stuff…

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.

Let's look at 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—it's mandatory.

Having HR helps you navigate the complex world of employment laws and regulations, ensuring that you stay compliant and avoid costly fines or employee claims.

Recruitment and onboarding

You can’t run your business without staff and finding the right people for your team is important, but not always easy.

HR can help you streamline your recruitment process, making everything from writing job descriptions to 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, it’s inevitable, but how you handle it and manage employees can make all the difference.

That’s where HR  comes in, it provides support and mediation to resolve conflicts and maintain a positive work environment.

Training and development

Investing in your employees' growth and development is key to keeping them engaged and motivated. Think of it like watering a plant, the more you do it, the more it blossoms.

With HR you can identify training needs, launch a learning program, and support career advancement opportunities. Because when your staff blossoms so does your business.

Performance management

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

HR can help you establish performance management processes and provide guidance on giving constructive feedback.

group of employees working at a small business

Employee benefits and payroll

Pay and benefits, play a large role in the world of work and offering competitive benefits and fair pay is vital for attracting and retaining 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

Having a  positive company culture is often the secret sauce 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 retention.

Attendance tracking and vacation planning

Your staff will take time off work, that’s unavoidable—not to mention the many  types of leave, they are legally entitled to.

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

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

Policies and paperwork

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

HR collaborates with management to develop policies and procedures covering areas such as workplace conduct, ethics, safety, and confidentiality.

Plus, HR  can manage the creation and maintenance of essential HR documentation, including employee handbooks, contracts, and compliance records.

Business growth

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

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

While HR might 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

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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?

As we've talked about, HR plays a crucial role in the success of any small business. However, selecting the right HR solution for your business can be challenging with the sheer number of options available, ranging from in-house HR to outsourced HR services.

But 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 by checking out our HR software for small businesses page or start your journey to stress-free HR with a FREE no-obligation demo today!


Jenny Marsden

Associate Director of Service

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