How to Structure Your HR Department as Your Small Business Grows
The goal of starting a small business is for it to take off. All the years of hard work and dedication have finally paid off and your business is receiving the recognition it deserves. You have new customers flocking in, your sales are off the chart, and your business is everything you could have ever dreamed of. However, as amazing as this success is, it can also be hard to handle. The influx of business is difficult to structure and suddenly you find yourself lost.
But as your small business grows, it’s important to keep your HR department structured. Human resources handles a lot, from managing payroll to recruiting new employees. You don’t want that to fall to the wayside just because your business is taking off. In fact, it’s more important than ever to have a structured HR department with a growing business. If this is something you’re struggling with, here is how to structure your HR department as your small business grows:
1. Separate the Department by Functions
There are many responsibilities of an HR department. So instead of having everyone in the department handle all the tasks, separate it by functions. For example, the recruiting manager handles all recruiting and hiring tasks, like creating job listings and sorting through resumes. The compensation manager deals with payroll and budgets. Having defined titles will help to better distribute the tasks throughout the department.
2. Use Tools
A growing business means more information and data to keep track of for the HR department. This can definitely get overwhelming, so make sure your department has the right tools, like a Human Resource Information System (HRIS). What is an HRIS system, you ask? It is essentially an online software that helps with the organization of HR tasks. It helps with recruiting and onboarding, managing payroll, scheduling, and more. Using this tool will make the running HR department significantly easier, and save time and money for the business as a whole.
3. Look at the Company Size
A growing small business means that more employees will be brought on the team. This is important to look at from the HR perspective to see if more HR employees need to be brought on. Generally, a business that has 1-50 employees doesn’t need a separate HR department. Instead, it may be beneficial to use a professional employer organization (PEO) to help with various HR tasks, rather than having a department within the business. However, as your small business grows, you will want to hire separate HR employees. Once your business hits the 50+ employee mark, then consider hiring someone. You may want to have an HR assistant first who will deal with tasks like posting job ads and filing paperwork.
4. Don’t Rush the Process
While your business is growing, you may be tempted to immediately hire HR employees to take some of the pressure off your shoulders. While that may be helpful at the moment, that feeling will be fleeting once you realize that you don’t have the funds or resources to accommodate a separate HR department with multiple employees. Don’t rush the process. Taking things slow and only hiring when absolutely necessary will save you a lot of money in the long run.
A successful small business is every entrepreneur’s dream- but it comes with having to take on a whole new realm of responsibilities. The HR department is extremely helpful with a small business, so it’s necessary to take the time to structure it properly. While a growing business may get overwhelming, remember to stay calm. Everything will fall into place with time.