Every small business, whether you are just starting up or already established, needs human resource management (HRM). At any stage, cash flow, productivity, and risk remain important concerns to all business owners. Your employees play a key role in each of these areas as to whether things are going well or not. However, just as with every area in business, your HRM will change with each stage of your business. In order to see solid growth, you need a solid HRM approach in each of the four stages of business development:
#1 Just Starting Up
Whether you’re just paying yourself or a couple of other employees, getting paid is one of the most important aspects to ensuring a motivated, committed team. However, getting paid also means complying with payroll taxes and related HR regulations. Outsourcing payroll at this stage will allow you and your team to focus on what you do well, and leave the compliance and tax issues to the experts.
#2 Making Your First Hire
This can be an exciting time for a business owner, and sometimes a little overwhelming. From an HR perspective, adding more staff places additional burdens on the business. You need to develop an employee handbook, job descriptions, efficient recruiting and onboarding practices, and performance reviews, all before making a hire. To keep things organized, scale up your outsourced payroll services to a more robust human resource management tools and advisors. For additional help, download this guide titled How to Make Your First Hire.
#3 Growing a Team of Employees
As your small group of employees expand, so do the time and complexity demands of HRM. For example, different sizes of groups of employees are subject to different labor laws, as well as eligibility factors for programs such as workers’ compensation and health insurance. These additional HR responsibilities require a significant amount of time – time that really should directed towards driving the continued growth. Here, an Administrative Services Organization (ASO) offers a broader range of packaged HR support.
#4 High Growth, High HR Demands
At this stage, your business operation is established and you have a solid employee team to support productivity and growth. This can be a great time to consider a Professional Employer Organization (PEO) relationship. Through a PEO, you enter into a “co-employment” relationship where the PEO provider becomes your dedicated HR management and benefits administration partner, while you focus on your business growth strategy.
Human capital is both a small business’s biggest risk and their biggest asset. Smart human resource management practices are key to fully optimizing your team and driving growth. Use these tips for your own business as it grows to create a solid HRM strategy at any stage.
