January 25th, 2022

When Does a Small Business Need HR Support?

The short answer to the question above is now! But in reality, it might depend. Sometimes the size and complexity of your business might not call for HR support for a while. For example, if you live in a state where employment laws and regulations are minimal and your team is only five people strong—you might be okay managing things without an HR function. 

However, if you’re in a state like Colorado, where your business can grow rapidly and employment laws and regulations are abundant—HR support is necessary sooner than you might think. 

When It’s Time for HR Support 

You might be proactively thinking ahead and searching for HR support. Or you’ve encountered an issue, and you’re wondering if you need human resources to take care of it. In either case, you’re on the right track being here. There are a variety of signs it’s time for HR support, but your small businesses will benefit most from HR support when:

  • Compliance issues are creating problems or putting your business at risk of a lawsuit. There are a lot of rules and regulations that come into play when you run a business. And if you don’t understand them, or don’t have an in-house expert who does, you can find yourself in some sticky situations. Paying your employees, staying on top of changing industry regulations, and dealing with tax and legal issues require expertise.
  • The size of your business is growing. Many small business owners and consultants agree that the time for HR support is when a company grows to 10 or more employees—at this size, it becomes harder for the business owner or a single employee to manage HR tasks. 
  • Your business is becoming more complex. As companies develop, they take on new products, locations, or roles. As a result, finding and keeping skilled talent—one of the primary responsibilities of HR—becomes critical to growing. And without someone well versed in this practice, it can become difficult and time-consuming. 
  • You’re spending too much time on administrative HR tasks. HR administration has a cost—and it’s not just a financial one. There’s a significant time burden involved as well. Securing employee benefits, paying employees on time, and managing HR operations are just a few time-consuming HR duties. 

If you’re going through any of the things above, then deciding it’s time for HR support is the easy step. But actually finding the right HR support for your business can be a challenge. 

For some small businesses, bringing in the HR function is concerning. They feel HR will limit their flexibility and cost more money. And sometimes, this is true. 

According to Payscale, the average starting salary in Colorado for an HR generalist is $55,000 and as much as $95,000 for an experienced HR expert. And while HR will set your business up for long-term success, that might mean more restrictions now—to avoid compliance issues later. 

Keep in mind, these costs are slightly offset when the average small business loses $12,000 a year dealing with compliance issues. Regardless, finding HR support is serious business. 

Why Every Small Business Eventually Needs HR Support

If you’re hesitant to hire HR support because you think you can handle everything mentioned above—think again. Even if your business is functioning well without an HR partner, it could be doing better. That’s because human resources allow organizations to focus on more strategic efforts that grow the business. Strategic human resources are the intentional, meaningful work of planning for the future, building strong teams, and developing and investing in your company culture.  

According to Deloitte’s High Impact Workforce Study, organizations that are more focused on evolving the work, workforce, and workplace are 1.7x more likely to meet financial targets and 3.5x more likely to retain high performers. Evolving the workforce and workplace isn’t possible without spending time on strategic HR. 

With the right HR support, you can relieve the administrative burden of HR and focus on HR strategy. The result of spending quality time on strategic HR is that you have much more engaged employees and managers and better employee morale—in essence, the kind of qualities that attract and retain the best talent. And only with the right people will your business be successful. 

What HR Support Can Do For Your Small Business

Avoid making the mistakes that many small businesses make when looking for HR support—such as not delegating HR responsibilities, not hiring HR expertise, and not realizing there’s HR support out there. 

Most small businesses start with payroll, compliance, and benefits support. But using an HR partner, like Obsidian HR, takes care of all your current and future HR needs. Here are all the ways that Obsidian HR can support your small business: 

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

Obsidian HR can function as your HR team—or at the very least, an extension of your existing HR staff. And our services are usually a third of the cost of a fully staffed HR team. So if you’re ready for HR support, we are here to help. Reach out to us today, or learn more from the guide below. 

Download Our Guide: Managing HR In-House or Outsource?

Download this extensive eGuide to learn whether in-house support or sharing the workload with an HR partner is the right fit for you.

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