Human Resources for Small Business Owners: Q&A

Many small business owners find themselves acting as a default HR specialist as they get established and grow. Planning ahead and understanding the rules will help avoid future issues, saving time and money.

We asked Ashley Clark, HR Senior Manager at Business Impact NW some common HR questions and what you need to know in these early stages.

What is HR and what does it include?

HR is the backbone of a company, ensuring labor compliance while defining the company culture and investing in the long-term success of its employees. HR makes sure you’re following the rules – those set by the government and your own business.

When should you hire a dedicated HR employee?

The short answer is it is up to you, but the U.S. Chamber of Commerce suggests bringing on a dedicated HR staff member when you have 10+ employees.

Some business owners decide to hire an HR partner sooner, rather than later. This decision takes into account how you value your time. Determine what your time is worth as the business owner. “These tasks can add up and take valuable time away from the actual productivity and profitability of your business,” wrote Concordia St. Paul University. “If you start to see a notable dip in your productivity level or aren’t able to keep up with the extra demands on time because of HR duties, it is probably time to consider hiring a human resource generalist.”

HR options include independent specialists, hiring a dedicated employee or using an outside integrated HR administration service.

Do I need an employee handbook?

If you are thinking about hiring employees, you should have some kind of handbook. A handbook can be any medium – digital, interactive, on paper, whatever works for your business. It acts as a resource for employee conduct, expectations and regulations that govern the workplace. These make up the foundation of your company culture.

Most employee handbooks are a combination of federal and state employment policies along with company-specific guidelines and expectations. It might include:

• Your company branding
• Mission or values statement
• Company policies:
  • Attendance, breaks
  • Dress code
  • Code of conduct
  • Company property
  • Expenses and reimbursements
• General employment information:
  • Equal employment opportunity policy
  • Equipment and safety
  • Harassment and discrimination prevention
  • Disciplinary process
• Compensation: pay dates, PTO/benefits if offered
• Work hours/schedules:
  • Company holidays
  • Time Clock/Timesheet Use

Many businesses require employees to sign a document showing that they have reviewed the handbook and understand the policies. Handbooks should be regularly reviewed for updates.

What are some of the ongoing HR responsibilities for a small business?

Once you’ve hired employees and defined a basic company culture, you’ll need HR to maintain the safety and performance of your team. This can include:

• Performance management (reviews, promotions, raises)
• Employee onboarding, coaching, and disciplinary action
• Separations and terminations
• Recordkeeping (employee files, payroll records, licenses and permits, insurance, etc.)
• Policies and procedures
• Safety and compliance
• Training and development
• Payroll and benefits

HR is a huge subject; this is a starting point, and we’re going to continue sharing resources, so stay tuned.

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Looking to learn more about hiring and HR for small businesses? Business Impact NW offers coaching sessions and recorded webinars on topics such as hiring, compensation, and healthcare. Explore our resources or connect with a business coach to continue building your team with confidence.

Considering hiring independent contractors instead of employees? Be sure to understand the legal differences and requirements first. Read our article about independent contractors in Washington State to learn more.