Top Focus Areas of HR for Small Businesses

When it comes to what HR can do for small businesses, there is much more to consider than just creating a happy and safe workplace for your employees. Even though you want to create a pleasant environment so your employees can enjoy coming to work, the tasks of HR are a bit more complex than that.

The importance of HR is supported by the fact that 75% of employees would stay longer at a company that listens to and addresses their issues. HR professionals are in the best position in the company to decide to what degree individuals are motivated to do their job. If HR is doing its job correctly, there will be an increase in employee loyalty, commitment, and performance, which can help your business achieve its goals more quickly.

So, what should be your top priorities as a small business when it comes to HR? This article will look at the top areas that small businesses should focus on to manage their employees effectively.

Development and Training

Employee retention and employee engagement are directly tied, and one of the most significant factors in employee engagement is opportunities for learning and career development. To put it in simple words, HR can improve employee retention by offering a path to advancement and learning opportunities to employees.

During training, one of the challenges is the struggle to keep your employees engaged with each other. In this case, icebreaker tools are an efficient and entertaining way to ease the tension and get everyone to feel more relaxed.

Documentation

HR maintains all the necessary paperwork for your business, which guarantees that your company is protected if a dispute comes up in the future and that your company is compliant with labor laws. The following documentation should be kept on each employee:

  • Employee General File. A general file of an employee contains documentation related to that employee. This includes W-4 forms, disciplinary action, payroll details, training verifications, reviews, and more.
  • Employee Medical File. A medical file contains information about disabilities or any other medical information on an employee.
  • I-9 File. The I-9 file verifies that your employees are eligible to work in the United States. Instead of keeping the employee I-9 files individually, they should all be kept together.

Compliance

Something that is closely connected to documentation is compliance. There are plenty of workplace rules and regulations, as well as labor laws. HR should be acquainted with the following laws:

  • Safety laws
  • Benefits laws
  • Immigration laws
  • Anti-discrimination laws
  • Leave laws
  • Wage and hour laws
  • Union laws

In addition, you should keep in mind that there is a requirement by the Department of Labor (DOL) for certain labor law posters to be posted in the workplace.

Payroll and Benefits

Another HR focus area we need to address is payroll management, which refers to the money that the company pays to an employee. Many complex tax withholdings and deductions need to be done accurately by HR each time pay is distributed.

Something that is just as important as good payroll management is offering benefits that will address your employees’ needs. There are benefits required by law and benefits that are not. The benefits required by law include:

  • Family and medical leave
  • Unemployment insurance
  • Social security tax
  • COBRA insurance
  • Workers’ compensation insurance

Benefits that aren’t required by law are the following:

  • Commuter benefits
  • Retirement plans
  • Dental and vision insurance
  • Health insurance
  • Paid holidays
  • Paid time off
  • Wellness programs
  • Work from home offering
  • Employee discounts
  • 401(k) plans
  • Employee assistance programs
  • Free coffee and other low-value perks

Final Thoughts

Any business’s success is dependent on the success of its employees. Employee performance can either be an asset or a liability for a company, depending on the circumstances. However, this liability can be mitigated when someone is managing your HR needs. HR for small businesses includes understanding all the regulations and laws so that you can handle everything from employee benefits to more complex issues.

In this article, we went through the top focus areas of HR for small businesses. All of the areas we mentioned affect and interact with each other, and each one contributes to the strength of the next. Focusing on these areas will enable a workforce not only to perform better but to perform at its best.