What do human resources for small businesses in 2023 and beyond look like?
As a small business HR solutions company, we get that question a lot. And in this post, we’re going to provide answers.
But before we get started, we wanted to define what small business human resources entails. We went to the small business experts at Business News Daily for an excellent high-level definition:
A human resources manager or department has many responsibilities. They recruit, hire, onboard, and terminate employees; perform administrative tasks; manage payroll and employee benefits; help with employee training and development; foster company culture; manage risk and safety measures, and, perhaps most importantly, help their company maintain legal compliance.
That’s a great definition, but HR, in a nutshell, is your people strategy. And human resources services for small businesses are more critically important than ever before.
Why?
The business climate in 2023 is more competitive and challenging for small business owners than it has been for many years. Much of this is due to events from the previous several years and the current financial and economic challenges stemming from hyperinflation, credit tightening, supply chain issues, and global sociopolitical events, like the war in Ukraine.
The bottom line is that money and business capital resources are tight. And recruiting and retaining exceptional people has never been more challenging.
But there’s good news on the horizon. At HR Worx, we’re huge fans of all the innovative, creative, tough, smart small business owners out there!
And we’re here to help you grow your business.
In this post, we’ll discuss three critical small business HR pillars, and how you can get your arms around them with straightforward solutions.
The goal is to help you cost-effectively free up more of your valuable time and create a workplace environment for your teams to thrive.
When people are thriving, retention and employee engagement will naturally increase, and that’s always a good thing.
So let’s get started with the basics.
Aligning Payroll With Accounting
Managing payroll can be a time-consuming, frustrating task for small business owners, even if you have a payroll app designed for SMBs, like Gusto, or Sage, for example.
There’s also more to payroll than managing payroll runs, although those can be challenging in their own right. No matter how you slice it, there has to be an integration between your payroll system and your accounting system.
If you’re like most of our clients, you have a diverse workforce. That can include exempt and non-exempt employees (more on that later), contractors, hourly, temp-to-hire staff, etc.
Regardless of how many employees and staff you have, though, your payroll and accounting systems need to be integrated.
In today’s world that usually implies knowledge of cloud applications from a security and data privacy perspective, time tracking apps, software API integrations, and data pipelines at a minimum. And who has time for all that when you have a business to run?
Don’t worry, we’ll close with a definitive go-to resource go for simple, affordable solutions—and we promise no uber-technical, high-priced consulting double-talk.
So what else are we recommending for small business HR practices in 2023?
Develop A Recruiting Strategy
Recruiting and retaining awesome employees will continue to be a challenge for the next several years as people are simply looking to make more money to counteract hyperinflation.
According to a recent article on CNBC, 96% of the workforce is at least considering a new job. That’s a sobering statistic. And the most common reasons are to escape a toxic work environment, make more money, or both.
Quiet quitting is also alive and well in 2023 as a silent killer to potentially erode small business employee retention.
That means that all businesses, regardless of size and scope, will likely be affected by employee retention issues in the coming months as the workforce continues to be turbulent.
So what’s the answer?
We’re recommending an “always be recruiting” strategy for all of our clients.
If you don’t have a recruiting strategy, and not you’re not sure what always-be-recruiting means, we can help you manage your unexpected workforce staffing and management needs.
Let’s talk about the third pillar of a solid small business human resources foundation.
Ensuring HR Compliance
HR compliance starts with a clearly defined process for recruiting, hiring, classifying, onboarding, compensating, and offboarding employees and other staff.
Classifying employees properly and following the ever-increasing workforce management regulations can be daunting for small businesses.
You need to be mindful of right-to-work regulations, union organizing activities, security and privacy of employee info, non-citizen worker regulations, and additional regulatory compliance requirements and labor laws pertaining to wages and contract employees.
HR Compliance requirements are different for every small business. First, you should consider an assessment of your HR infrastructure to identify any potential weak spots or hidden liabilities.
Then you can build a solid foundation and framework of documented processes and policies to ensure you’re always inside the guardrails of current human resources best practices and compliance regulations.
Does all this sound complicated? If so, we can help with some straight talk and small-business-tested solutions.
HR for small businesses is a necessity to have, but it shouldn’t be a burden or an expensive liability.
With the right partnership in place, your human resources infrastructure should be on the asset side of your balance sheet, not the liability side. You’ll also free up more personal time that you can spend growing your business.
Are you a small business owner who wants to reduce your risks, streamline your workforce management systems—including recruiting, onboarding, offboarding, and payroll—and free up more of your time?
If so, what’s your next step?
You’re in the right place for concrete information, like what are the costs and benefits of HR partnering solutions for small businesses, what does a partnership look like, etc.
First things first. Let’s do a complimentary assessment of your business’s HR environment to uncover any potential weak links and discuss the unique HR challenges you’re facing.
Our goal is simple. As a small business owner we want to help you build an ironclad HR infrastructure that will keep you fully staffed, your employees and staff motivated and engaged, ensure full HR compliance, and provide tight integration between all human resources and related systems.
Wherever you’re at in your small business HR implementation and management journey, we’re here to help. Our team has decades of HR experience for you to leverage. We bring Fortune 500-level HR practices to small businesses seamlessly, professionally, and cost-effectively.
Ready to get started with a no-obligation consultation with a small business HR professional?
Call us at (952) 234-7715 or get in touch with our team online today.