November 16th, 2021

3 HR Mistakes Small Businesses Make Before Getting HR Support

There is plenty to contend with when you’re a small business owner — we don’t have to tell you that. The top challenges you face likely include: 

  • Managing the cost of healthcare
  • Sourcing and hiring qualified employees
  • Keeping skilled employees
  • Dealing with tax complexity
  • Financing your business 

Except for financing your business, all of these challenges fall under the responsibility of HR. As a result, HR support is critical to a small business. 

Unfortunately, many small businesses use HR as a reactive business tool rather than a strategic function of their business. A compliance issue, troubles with hiring, payroll, or benefits administration are usually the motivating factors for a company to look for HR support. But before that happens, here are some of the mistakes small business owners often make in their HR efforts. 

3 HR Mistakes Small Businesses Make 

1. Not delegating HR responsibilities

As soon as you hire your first employee, some sort of HR function is necessary. However, the first step business owners usually take with their HR is to handle it themselves. If this is you, we feel for you. That’s a lot of work and responsibility to manage HR in addition to your business. 

Research shows that 54% of business owners handle employment matters themselves — usually to save money. Managing HR themselves is a mistake too many business owners make. A business owner’s time is more valuable when focused on operational matters. And as a business grows, HR obligations grow with it. If a business owner is managing HR, soon their entire time will be devoted to it — clearly not a successful long-term business strategy.

2. Not hiring HR expertise

Once the HR responsibilities become too much for business owners to handle on their own, they look to delegate. While this is a good thing, whom a business owner delegates the HR function to is significant. 

Handing responsibilities to another employee not versed in HR is another mistake small businesses make with their human resource needs. An administrative assistant, office manager, or secretary shouldn’t be handling HR unless they have HR experience. It can quickly become overwhelming, take over their other job duties, and leave the business open to risk.

3. Not realizing there’s HR support out there 

You’ve heard the saying, “you don’t know what you don’t know.” In some cases, small business owners have no idea that HR services exist to support them. After all, many business owners don’t start their company with HR in mind. But small businesses have options when it comes to their HR. They can either handle all of their HR internally, outsource all of it, or do a combination of the two. 

Once you realize there’s HR support for your business. It’s time to decide when and how you’ll take advantage of it. 

When It’s Time for HR Support

Sometimes a small business has to make the mistakes noted above to realize they need HR support. For others, there are more serious mistakes or signs that signify it’s time to look for HR services — but don’t be one of those companies. Consider HR support before an issue occurs. 

Most small business owners and consultants agree that the time to get HR support is when a business grows to 10 or more employees. However, we find that any small business looking to grow can benefit from HR support regardless of its size. So whether you’re 5 or 50 employees, here are some of the areas that you can take advantage of with HR support: 

  • Securing & Offering Employee Benefits
  • Handling Payroll, Compliance & Legalities
  • Managing HR Operations
  • Onboarding & Growing Teams
  • Motivating & Engaging Employees
  • Training & Developing Employees
  • Recruiting Top Talent

Most businesses start with payroll, compliance, and benefits support. However, depending on your organization, it might make sense to use a variety of HR services. To learn more and read about the benefits of HR services for small businesses, download our guide below. 

Download Our Guide: 3 Key Benefits of Outsourcing HR

Download this guide to learn more about how outsourcing HR helps you save costs, stay compliant, relieve the administrative burden, and more.

download link

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