July 19th, 2022

3 Ways to Manage HR Services for Small Businesses

Your small business needs assistance with human resources, but where do you turn when you have limited time, staff, and budget? 

As soon as you hire your first employee, there are necessary HR functions you must handle by default — such as onboarding forms to fill out, payroll to set up, training to conduct, laws to comply with, taxes to withhold and pay, and workplace policies to implement. From there, as your team grows so do the HR responsibilities

That’s why it’s a good idea to decide in advance how you want to handle HR as your business evolves. Here’s a look at three ways you can manage HR services for small businesses — and why working with an HR partner is one of the best decisions you can make. 

1. Do It Yourself

Many small businesses have a can-do attitude when it comes to human resources, where the business owner or a staff member takes on the organization’s HR tasks. It can feel like a badge of honor to wear multiple hats in a small business, and in conjunction with saving on costs, this can often make do-it-yourself (DIY) HR appealing.

It’s important to understand though that much of human resources requires a high level of knowledge about various processes, laws, and regulations — think payroll, benefits, worker’s comp, and regulatory compliance

Beyond understanding the laws and regulations, there’s the amount of time you need to dedicate managing the day-to-day administrative load that comes with HR and dealing with the individuals you’ve employed. This includes hiring, onboarding, training, managing performance, mitigating workplace conflicts, ensuring benefits and payroll are administered, and even termination. All these responsibilities come with their fair share of time commitment. 

In between those tasks, you’re developing and communicating the workplace rules and policies you want your workforce to follow, including standards of conduct, health and safety guidance, and an employee handbook that covers all of it. 

The takeaway: While DIY HR may be a challenge you’re willing to embrace, you can quickly get caught up in all the details and time-consuming tasks required for the full breadth and depth of HR management — which leaves you much less time to concentrate on the strategic work of growing your business.

2. Outsource a Portion of Your HR Needs

DIY HR might work for a little while, but eventually the sheer effort and logistics of managing HR in-house leads many small businesses to outsource certain aspects of HR. Outsourcing HR services can help reduce your overall business costs and risk while increasing efficiency.

Some of the best services to outsource include payroll, benefits administration, and HR compliance. Each of these can be managed through a combination of software and professionals who specialize in them — taking the burden of knowledge and manual effort off your shoulders. 

The first aspect of HR most small businesses tend to outsource is payroll. But if your business provides health insurance to employees, outsourcing benefits can be the most impactful HR service to outsource. Outsourcing benefits gives you access to more affordable rates and plans. Another area to outsource is compliance. Leveraging HR support for the compliance side of the house can also give you invaluable legal expertise and guidance that you may not otherwise have available so you can avoid costly mistakes and violations.

The takeaway: Outsourcing certain HR services is a smart, cost-effective approach to managing HR. Especially if you’ve reached maximum capacity on how much HR you and your team can do yourselves. Keep in mind though that if you’re outsourcing HR to a variety of providers instead of going with one vendor, there will still be a high level of oversight needed to manage and communicate across multiple parties. Instead of managing the HR tasks, you’re then managing multiple vendors, contracts, and silos of information. 

3. Use a Full-Service HR Partner

Instead of managing your HR needs in pieces, outsourcing HR services for small businesses to a full-service HR partner is the best option of them all. From top to bottom, inside and out, a full-service HR partner supports and manages your most important HR tasks through a single relationship that provides modern HR technology solutions and on-hand expertise. 

A full-service HR provider acts as an extension of your team or your dedicated human resources department, allowing you to get back to growing your business.  

Whether you need help with the daily responsibilities of HR — such as payroll, benefits, and compliance — or with your internal policies, practices, and strategies, a full-service HR partner steps in wherever you need them. They fill in knowledge gaps, give you guidance, and relieve the day-to-day HR burden so you can focus on growing your business.

Most importantly, having an HR partner who is especially knowledgeable in the laws, regulations, and idiosyncrasies of doing business in your specific state can relieve you of one of the biggest challenges of running a business. 

Here in Colorado, having a partner with local expertise helps you smoothly navigate the regulatory environment while making the most of Colorado’s economic opportunities and business-friendly programs. Plus, with all of your HR needs being handled through one vendor and one partnership, you don’t have to worry about the cross-communication and management of multiple services. 

The takeaway: Using a local, full-service HR partner takes the burden off you and your team  you so you can get back to growing your business. A full-service HR partner is able to manage everything from payroll and benefits to compliance and internal policies. Plus, as your business grows and evolves, a full-service HR partner is built to scale with you so expanding your workforce, improving benefits, complying with new and changing laws, and other complexities won’t slow you down. 

Partner With Obsidian HR

Obsidian HR is a full-service HR partner, based here in Colorado, that your small business can rely on. Whether you’re just starting out, or in the midst of growing your team, partnering with Obsidian HR lets you reach your business goals without worrying about or getting overwhelmed by the critical responsibilities of HR. 

As you grow your small business, HR complexity increases. Human resources compliance plays a critical role in every small business because it’s about recognizing the responsibilities you have as an employer and taking the right steps to protect your business and employees.

To learn how to navigate HR compliance as a small business,  reach out to one of our experts or download the eGuide below.

Download the Guide: Small Business Guide to HR Compliance

Download the Small Business Guide To HR Compliance to learn what HR compliance is and why it’s important for small businesses. In this guide, we cover common issues and difficulties of managing HR compliance and how to manage HR compliance as your business grows.

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