The scenario is a familiar one for many small business owners, says Carole Arndt, President of The Human Resource EDGE, Inc., a company that places HR professionals in a variety of industries. When most small businesses are started the owner or manager took care of HR functions such as posting job openings, interviewing, hiring. The CFO took care of finding benefit vendors and collaborated with the owner on salary decisions. In really small companies the owner did all of these.
In other cases a bookkeeper – sometimes even a part-time employee at that – may have taken care of payroll. And, as the business grew, many of these functions became more time consuming, required more attention than these individuals could dedicate. Then suddenly, as the business and staff grew, you have employees that now needed performance reviews and feedback. They needed a go-to person to address any issues with co-workers, managers, or even the owner. They needed a voice to turn to.
“As a result, the payroll clerk in the finance department might have then picked up the administration of the benefits,” says Arndt.
“Soon there were employee relations issues, employment law issues and training needs,” says Arndt. “In other words, most small companies wake up one day and realize they have all this ’employee stuff’ going on and no real people strategy in place today or for the future. This is when most companies decide they need to do something – but are not really sure what that ‘something’ looks like.”
It is no surprise that when a business launches many small companies don’t have a formally recognized human resource department, says Arndt, who adds: “I do know, however, that a company hits a point in time when they know that what they have isn’t working.”
If you are facing the scenarios listed above, or asking these questions below, then it might be time to consider hiring an HR staffer:
- Do we bring in an HR Manager, someone with solid HR credentials and work experience who can build the HR function?
- Do we turn everything over to the payroll-benefits clerk?
- Can we afford it?
“I’ve seen all of these scenarios play out,” says Arndt. “I’ve seen it work, but I’ve also seen it fail miserably. Where I have seen the most success is when an HR consultant is engaged early in the process – even before there is a recognized need for an HR function.”
If a company has a strategic business plan, they need a strategic HR plan, even if they do not feel the need to have a full-time HR professional on staff says Arndt.
What are your options if you don’t have the financial resources to hire a dedicated HR staffer? Consider a consultant. In these situations, a seasoned HR Consultant can work closely with the owner and the management team to develop an HR strategy which aligns with the business strategy, says Arndt.
“This individual needs to be a good fit with the organization, not afraid to ask the tough questions and not afraid to give tough answers if needed,” adds Arndt.
Farhan Farooqui?, President and CEO of Southlake, Texas-based HR MILIEU, an HR consulting firm that provides customizable HR consulting services to fit specific business needs, suggests small businesses consider an HR audit to determine what specific HR needs they may have. Farooqui’s company provides a complimentary consultation (1-844-MILIEU-1/1-844-645-4381) to discuss HR/staffing needs and to help develop a strategic plan to see what fits best for the small employer. His company can analyze the tough scenarios, like this one:
“It may be a good idea to have an HR professional hired before a recruiter is hired so the two roles complement each other and provide support,” says Farooqui. “If the employer has 50 to 250 employees, the first step is to get a trained HR manager or HR managed services before hiring a dedicated recruiter.”
The reality is that most small employers, especially with under 50 employees, add a single body to run HR: From benefits to compensation to recruiting.
“Not only it is hard to find this person who can wear many different hats, in reality, such employees, the so-called all-in-one HR Manager, tends to focus more where their interest lies,” says Farooqui.
At HR Milieu they help clients hire on an as-needed basis, or provide on-going support as a true business partner that can provide a wide variety of HR and recruiter services.
Like Arndt, Farooqui agrees that putting a plan in place is the best way to assess current and future HR staffing needs. If you are a small business without an HR person, department or team – the time is now to consider working with a consultant, completing an HR audit or putting plans in place to hire a dedicated HR staffer.
If a business owner was asked: Do you need a dedicated HR staffer, the answer is not an easy yes or no, says Farooqui. Because there are many factors to consider, including these, says Farooqui:
- What level HR/recruiter can a business afford? Farooqui says small business owners should expect an average salary of a junior HR staffer/recruiter to be around $48,000-$60,000 for someone with one or two years of experience. Add in benefits and/hire an HR staffer with more experience, then that number rises.
- If hiring slows down, how does the business plan to create 40 hours of work for this HR staff member align? Will there be additional duties this person is responsible for?
- Face of the company: Keep in mind this person helps internally and externally – they are the face of the company in many cases and responsible for promoting the opportunities – and bringing in the right talent.
“Many small employers do not have the expertise to manage such resources or provide growth, development and/or direction,” says Farooqui.
On the other hand, small employers must see this role as an integral function. No less than the sales, marketing or the general manager. Finding the right time to hire that dedicated HR professional – that’s the challenge today’s small businesses face.
“Investing in a strong HR professional who can do HR and staffing goes a long way,” says Farooqui.
So does taking the time to analyze when it’s the right time to hire that dedicated HR staffer. That time to plan is now-so you are ready to hire later.