HR Services for Small Businesses – All you Need to Know

Every successful business reaches a point where they need to expand. Let’s face it, even if you’re just a one-man band there is only so much you can do and expanding your empire is only possible with a little help. Whether that is to manage administration or grow your team, you will eventually need to consider HR services for small businesses.

What is HR?

HR (short for Human Resources) is a department in most companies which contributes to the everyday running of a business. Although HR is sometimes overlooked, those that work in this field are true specialists in everything from expanding, developing and the day-to-day running of a business.

While some businesses have an entire department dedicated to Human resources, others choose to outsource these services. Those that have not got to either of these stages may find themselves taking care of HR responsibilities in line with their designated role.

Do businesses need a HR department?

Doubling up on responsibilities is a risky business because not only are HR tasks being managed by untrained professionals, you also take valuable time away from the main responsibilities of a role. Many businesses turn to HR when this starts to affect an employee’s ability to contribute to business goals, however, in some ways it should be dealt with at a much earlier stage.

To better understand the impact of a Human Resources department on a company, let’s take a look at just some of the tasks HR professionals get up to:

Staff recruitment: Not only will a HR department interview and recruit new staff, they also work towards the development of your team and ensure that their training needs are being met. These days, companies have a true understanding of how employing someone who can fulfil the requirements of a role is one thing, however having someone who fits into your company’s culture is as equally important. HR professionals are particularly good at meeting these needs.

Staff retention: In line with training, ensuring that development needs are being met helps improve staff retention. Having a neutral party to confide issues in is key to the professional well-being of your employees and developing a performance review process will contribute to their development.

General administration: HR professionals are also experts in payroll services and dealing with everyday tasks you don’t have time for. Ensuring that your staff are paid on time contributes to retention and you may find that having a professional organise travel arrangements will not only save you time, but their expertise may also help you save money too.

Legal issues: Perhaps most importantly, people who work in Human Resources are trained to understand and stay up-to-date with employment laws and other legal matters that may affect your business. This could be everything from legally binding documents to health and safety procedures your business is required to adhere to.

Do small businesses require HR?

Based on the factors outlined above, it is clear that a business of any size can benefit from a HR department. Even if it is simply to keep on top of legal paperwork and administration, having an expert take care of these issues allows other employees to focus on their own specialism and contribute towards business goals.

However, where you find your human resources specialists is another story. According to industry experts, small businesses can benefit from outsourcing HR until they have around 20 employees. There is even evidence to suggest that businesses of up to 200 choose to outsource a part of their HR efforts to help a few onsite human resources employees.

This is an extremely cost-effective option. Not only will you have a team of highly qualified HR specialists at the other end of the phone, your business will not be liable for any problems that arise with HR.

Should you outsource HR efforts?

There are of course some disadvantages to outsourcing human resources services. Processes can take a lot longer to implement and there is no one onsite to truly understand your business, its needs and its culture.

With the wrong HR agency, you also run the risk of falling into cookie-cutter HR services where only a name changes on documents such as terms of employment and employee handbooks.

If you do choose to go down this route, you should consider the length of your contract with the agency and how much notice you are required to give to terminate your services. In some cases, you could have your hands tied for up to 5 years and be required to give at least 6 months’ notice.

HR services for small businesses

There are many different agencies you can choose from to outsource your HR efforts. While most agencies can perform the majority of HR tasks, some specialise in particular fields and even HR services for small businesses. Consider evaluating your needs and choosing on this basis.

Best HR agencies for small companies

There is, of course, a huge amount of HR agencies and this can be overwhelming for a small business. We have selected some of the top HR agencies in the UK for small businesses, which can be seen at a glance in the table below.