Are you planning to set up a new small business? It is, of course, an exciting task but you will have to do a lot of work. It is not as easy as it sounds, as establishing an HR department is quite time-consuming. There is a common misconception that small businesses do not require an HR department. But HR team is an asset for any business if you want it to grow and gain success. 

Setting up an HR team in a small business is essential in creating policies, planning processes, and mitigating long-term and short-term needs. HR policies are directly associated with the company’s growth. Furthermore, they streamline the talented minds to improve productivity and profit exponentially. 

 It is quite natural for start-up companies to ignore establishing the HR field. They commit this big mistake and intend to wait until their businesses grow. But bear in mind that all businesses interact with people right from the first day. Therefore, relationship management being a strong base for HR is vital for business growth.

How Does Human Resource Management Benefit Small Businesses?

The benefits of human resources for a small business are many. Though outsourcing the HR process is not feasible for a start-up company, it is mandatory. 

Healthy Environment

A pleasant and healthy workplace will make the employees feel empowered and perform their best. A motivational ambience is crucial for the business’s success but takes time to establish. An HR department will be able to provide such a fair workplace environment through its procedures and policies. It supports the workers by resolving conflicts and ensures that they are heard at all points of time. Therefore, an HR department is essential for the smooth performance of any business. 

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Compliance

An HR professional is held responsible for regulating issues within the company. The employees have to comply with the regulations. There can be penalties for missing deadlines, failing to submit the right forms appropriately, and many more. However, these regulations are subject to change, and an HR team keeps all their employees aware of them.

Hiring

The hiring process involves recruitment, onboarding, training, and performance management. All these are handled by the HR team and are crucial for boosting the performance of the workforce. The HR professional manages all these to help with the flow of the business. 

Retention

Retention of talented employees is another HR responsibility as it depends on the recruiting procedure. If the hiring is done well, the retaining process also becomes simple and easy. Therefore, this solely depends on the effectiveness of HR. The retention process includes monitoring backgrounds, workflow, time, and performance reviews. With talented employees, an organization is likely to create the best work environment.

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Step-by-Step HR Department Checklist For Start-Ups

Before establishing an HR department for your organization, you will have to work on its structure. It is a step wise process, and let us discuss them in detail.

Design

The basic HR plan for operation must be developed as the first step when setting up a new business. However, it need not be planned on day one. But this planning will help the company to expand in the future and improve the HR functioning.

Create 

It is always not people who make up an HR department but also includes various processes. They are attracting, sourcing, recruiting, onboarding, training, retaining, and off boarding. These have to be meticulously created to offer the best structure to the business. A proper formation of all these processes will help you in the following ways.

• Take better and quicker decisions.
• Meet the company goals. 
• Align with the strategies of the organization.
• Optimize the resources with the right number of employees.

Structure

A structure is essential for any HR department. Assigning roles and responsibilities are the basics of any structure. Start with the top HR roles in designing your structure. They are the HR manager, HR director, hiring manager, recruiting specialist, and HR coordinator. After doing this, carry out a skills audit in your concern and see other necessary HR operations you will require. You can either recruit new people or upskill existing employees to fulfill these positions. Performance management, benefits administration, compliance, and onboarding are the few commonly required functionalities in every start-up.

HR KPI

We all know that an HR department is needed for even small companies to achieve success. Measuring the HR KPI is the best method to ensure that various processes are being carried out optimally. Hence make KPI part of your human resource strategy, which will help in reaching company goals easily. The KPIs to track are absenteeism, hiring time, employee satisfaction, training effectiveness, employee performance, talent and retention identification, productivity level, etc. Employee Monitoring Tool like Flowtrack, Vericlock, Workpuls, and other automated software solutions greatly benefit the HR KPI process. 

Collaboration

The HR department is an all-rounder in various areas of a business. While setting up your business, you get adequate input from your manager about other departments. Please present it to your HR department as they will be the point of reference for every job role in the company and administer the whole system.

HR Software Solution

In an emerging world of technology, you can’t maintain spreadsheets or monitor work manually with an HR department. A reliable HR management software like HRAPP employee monitoring software can be the right tool to perform various HR tasks effortlessly in this case. It will automatically calculate the time consumption, set KPIs, optimize processes, monitor laborious tasks, etc., with just internet usage and mouse clicks.

Closure

Your employees are your number one asset. An owner who takes good care of his employees will always be the best employer in town. Even small companies need to engage in human resources and comply with employment laws and labor regulations. So, it is important to create an effective human resource department as per the step wise plan and execute it according to your idea, goal, and vision. But make your job easy by working smart rather than hard. Install HR software applications to simplify the process as they calculate and perform the basic HR procedures with precision automatically.