5 Essential HR Tips for Small Business Owners

When it comes to running a small business, HR is rarely a top priority. However, if you’re unable to properly manage the human resources in your business, you’ll likely have poor outcomes in other areas. We narrow in on five essential HR tasks that every small business owner can do that will lead to positive results.
5 Essential HR Tips for Small Business Owners
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We know that when it comes to running your small business, HR isn’t always the top thing on your priority list. You’ve got a lot on your plate as a small business owner, and rarely is there time to think about anything beyond the immediate needs of your business.

Because we understand how challenging it is to manage everything, we wanted to provide some helpful, easy-to-execute, HR tips for small business owners. These tips will allow you to create a great experience for your employees, follow some HR best practices, and the best part is that they won’t take up too much of your time.

Implementing all (or just a few) of these things will dramatically improve the outcomes of your business. After all, HR can be a revenue driver. By focusing on what’s important, and committing to do these things consistently, you’ll create a better workplace for yourself and your employees which will allow you to better serve your customers.

HR Tips for Small Business Owners

Remember, HR stands for Human Resources. While HR can sometimes come across as boring, or even intimidating, when it comes down to it, HR is nothing more than treating the humans in your business the right way.

So how do you do that? Here are five ways you can make a big impact:

  1. Speed and Communication Matter in Hiring
  2. The Onboarding Experience is Critical
  3. Train Employees So They Can Succeed
  4. Offer Competitive Benefits and Compensation
  5. Use HR Software for the Hard Stuff

We’ll dive into each of these individually so that you have some concrete, actionable steps to take your company to the next level.

1. Speed and Communication Matter in Hiring

Hiring good employees is a critical aspect of operating your business. If the people you hire aren’t able to perform the work, can’t show up on time, always have a bad attitude, or treat customers poorly, then how will your company ever succeed?

While this may seem obvious, it’s shocking how few business owners take the hiring process seriously. Most business owners take the “if you build it, they will come” approach to hiring. They think that if they list a job post then the best candidates will apply and that will be the end of it.

Wouldn’t it be nice if it were really this easy? Hiring is actually full of complexity. To be truly great at it you have to write great job descriptions, follow best practices, use software to automate processes, and so much more. But we don’t need to get into all of that here.

If there’s one thing that you can do to immediately improve your hiring process (and therefore give you a better chance of hiring great people) it’s this: focus on speed and communication.

When an applicant submits a resume to your company, it’s highly likely that they’re also submitting resumes to dozens of other companies. When someone needs to find a new job, they don’t put all their eggs in one basket and pray it works out. Because of this, your business is now competing with all those other businesses to hire this candidate. The company that responds first will often have an advantage.

So, what do you need to do? Communicate quickly. As soon as you get an application, shoot an email back to the candidate. If they’re interesting, let them know that you’d like to bring them in for an interview. If they’re not qualified, let them know that you’re moving forward with other applicants. Either way, try to get back to all your candidates within 24 hours of their application submission.

"Communicate quickly. As soon as you get an application, shoot an email back to the candidate."

Next, continue to be quick with your communication throughout the hiring process. If you’re interviewing multiple candidates, give them expectations about how long it’ll be until they hear back from you. Stick to these deadlines and communicate with them on time. If they’re not hearing from you, then they’re probably hearing from another company.

Finally, when you find the candidate you know you want to hire, don’t hesitate to make them a job offer. There’s no point in dragging your feet at this stage. If they’re talented, then there are other companies who will also be offering them a job. Be first, make a competitive offer, and show them that you’re committed to them moving forward.

Speed and communication are critical to the hiring process. If you do nothing else, master these two elements. You’ll see the quality of your employees increase noticeably.

2. The Onboarding Experience is Critical

Once you get a talented employee through the door, it’s important that their onboarding experience is great. Over 20% of employee turnover happens within the first 45 days of work. Any employee who’s new to a job will wonder if they made the correct choice in joining your company. During the onboarding process, it’s your responsibility as a small business owner to help them realize that they did make the right decision.

What is onboarding? Simply put, it’s the process or program implemented by a company to make the new employee feel welcome, confident, and comfortable. Onboarding begins immediately after an employee signs their offer letter and can last anywhere from a few weeks to a few months.

"The process or program implemented by a company to make the new employee feel welcome, confident, and comfortable."

Many small business owners think of onboarding as nothing more than paperwork. And while there’s certainly no shortage of new hire paperwork to be completed before the first day, onboarding is so much more than signing documents.

Consider doing the following when creating your new hiring onboarding experience:

Make the first day special: Help the new employee get comfortable in their new surroundings. Give them an office tour (if onboarding in-person), introduce them to their co-workers, and take them out to lunch. Make it a fun day that they’ll go home and tell their spouse or roommates about.

Orientation: Part of the onboarding experience is providing orientation for the new hire. During orientation, don’t only explain to them the responsibilities of their job, but help them understand the company’s mission, vision, and values.

Assign a mentor/friend: It can be scary to join a company where you don’t know anyone. To combat this fear, assign an employee to be a designated mentor for your new hire. This person should be able to answer the new hire’s questions, help them with their responsibilities, and train them on how to do their job.

Check-in: Good business owners will check-in with their new employees regularly to see how they’re doing. This gives the business owner an opportunity to evaluate their hire, and it gives the employee the chance to ask questions.

The hiring process can be time consuming and expensive. Once you get a new employee in the door, it’s critical that they have a great experience. Because employee turnover is frequently related to the onboarding process, you can save your business time and money by investing in employee onboarding.

Hiring and onboarding new employees can be expensive. Calculate your costs by using our free onboarding calculator!

3. Train Employees to Succeed

An extension of the employee onboarding process is employee training. Small business owners often make two big mistakes when it comes to employee training: 1. They don’t do much of it at all, or 2. They do employee training once and assume it never needs to be done again.

For an employee to succeed, they need to be trained. Even if they have previous experience working in a position with a similar job title, there will be things that are unique to your company that they don’t know. If you are unable to train your employees well, then you should lower your expectations for what they can accomplish. Good training leads to good results.

So how should you structure your training? It’ll depend based on the type of company you run and the position the employee was hired for. Restaurant servers will be trained differently than outbound sales reps. Graphic designers will require separate training from insurance agents. Because every position in every company is so different, it’s hard to make generalizations about what your training should look like and what it should include.

However, we’ve come up with some principles that should apply to almost any job in any industry:

  • Don’t try and complete all the training in a day or two. Give employees weeks to train.
  • Revisit training after 60 or 90 days of employment. It’s likely your new hires have forgotten something since their first training.
  • Structure and standardize your training process so it’s the same for everyone who’s hired with a certain job title. This way you won’t have to reinvent the wheel for every hire.
  • Be more thorough than you think you need to be. It’s better to provide more information than less.
  • Record videos or create documents that capture your training materials. Give employees continual access to this information so they can go back and learn on their own.
  • A month after an employee completes their initial training, ask them to rate their training experience. Find out if it actually prepared them well for the work they’re doing. Ask them for suggestions on how to improve or change.
  • Have your experienced employees help in the creation of the training, and in the training itself. Your new hires will want to learn from their co-workers.

Remember, if HR is all about humans, then getting your employees (the humans in your company) trained and prepared so that they can succeed in their job is one of the best things you can do for them. Employees who are confident and capable are also happier, more engaged, and more willing to go the extra mile for your customers.

4. Offer Competitive Benefits and Compensation

Do you know what employees absolutely love? Being fairly compensated for their work. When surveyed, employees have said time and time again that they value fair pay more than any other workplace attribute.

When it comes to pay and benefits, you don’t have to be at the highest end of the spectrum, but you should do all you can to avoid being at the low end. When paid fairly, employees work harder, are less likely to look for another job, and are less stressed. Add in a competitive benefits package and you’ll have all the makings of a world-class company.

"When it comes to pay and benefits, you don’t have to be at the highest end of the spectrum, but you should do all you can to avoid being at the low end. "

To understand how to pay employees properly, you need to understand what your competition and the broader market are paying for similar work. Services like PayScale, Glassdoor, and Indeed can help you understand what fair compensation looks like for each employee you hire.

Beyond the salary, employees will also be interested in your benefits package. Let’s talk about what that means. Right off the bat, you might think of things like health, dental, and vision insurance, life insurance, and 401k plans. While these benefits are surely important and are part of a competitive package, there is much more to employee benefits than just insurance and financial planning.

Of course, we’re talking about fringe benefits. Fringe benefits are an additional form of compensation given to employees that are outside of an employee’s salary or core benefits (like the ones listed above). Offering fringe benefits allows you to create attractive benefits packages without spending huge amounts of money. Of course, if you want to spend more, you always have that option! But fringe benefits allow you to make an appealing case to employees that they should stick around for the long term.

So what kind of fringe benefits might you offer? Here are just a few ideas:

  • Paid time off
  • Generous parental leave
  • Health savings accounts
  • Tuition reimbursement
  • Commuter reimbursement
  • Gym memberships
  • Paid entertainment (Netflix or Spotify subscriptions)
  • Online learning opportunities (through Udemy or Coursera)
  • Live or virtual conference attendance
  • In-office snacks
  • Flexible work schedules
  • Flexible work location (in office or from home)

When it comes to employee compensation, remember two things. First, remember that employees truly value being paid a fair salary. If they feel like they’re being underpaid, they’ll feel undervalued. Because of this, they likely won’t stick around long. Second, remember that even if you can’t afford to offer medical insurance or 401k plans to your employees, it doesn’t mean you can throw together an appealing benefits package. Fringe benefits are a great way to provide a lot of value for a much smaller price.

5. Use HR Software for the Hard Stuff

While we’ve repeated time and time again that HR is all about the humans in your company, the reality is that there are some parts of HR that are very administrative. Payroll doesn’t run itself. Tracking employee PTO balances doesn’t magically happen on its own. And hourly employees clocking in and out all day need to have an easy way to do so. Some small business owners choose to try and manage all of this themselves, only to learn that it can be an absolute nightmare. This is the hard stuff. Let software take care of it.

Software products like Eddy are specifically built for these kinds of tasks. Not only can they run your payroll, track employee PTO balances, and allow employees to clock in and out, but they can do much, much more.

A good HR software program can literally save a small business hours of time every single day. We recommend it to all small business owners because we’ve seen just how big of an impact it can make.

You didn’t get into business to worry about mundane things like new hire paperwork, tracking the dates when your employees completed their HIPAA training, or running EEOC reports for the government. No, you got into business because you’re passionate about the product you sell, the people you work with, and the problems you’re solving.

The technical, compliance-laden side of HR can be tough to manage, even for HR professionals. Software makes it easy and eliminates much of this burden. If you follow steps 1-4 by focusing on the people in your organization, then a good HR software solution will keep everything running smoothly in the background.

Eddy was built specifically for small businesses to improve and manage their HR processes.

Conclusion

While every company faces its own set of unique challenges, there are certain HR principles that can be applied universally to small businesses everywhere. We hope you’ll take these principles and apply them to improve the people-side of your organization.

We know that HR isn’t often a top priority for small business owners. However, we would like to propose that it does become a priority. It doesn’t take much to make a big difference.

Every small business owner can contact job applicants a little faster and be more willing to communicate with them.

Every small business owner can place a greater emphasis on employee onboarding and training so that their employees can be better at their jobs.

Every small business owner can make an effort to pay employees fairly and offer them additional benefits.

And every small business owner can do themselves a favor and let good HR software handle the hard stuff. This will free them to do the work they love.

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