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There are some Human Resource (HR) functions that need to be performed in every business, whether a small family-owned operation or a major corporation. Paychecks must go out on time, tax records need to be accurate, benefits need to be determined and distributed, and more. Many of the same government laws and risks that apply to global enterprises also apply to “Mom and Pop” shops.

Organizations have become more sophisticated and employees are more engaged and aware of worker rights than ever before, and the risks of owning a business have grown. To be proactive, every business needs to make sure its employees are well cared for and ensure it’s complying with state and federal regulations. Waiting until a valued employee quits, someone files a complaint, or an auditor shows up at your door is too late.

Ask these questions to determine if now is the right time to amp up HR efforts to help mitigate your risks.  

1. Is Our Business Manager Also Our HR Director?

The business manager at a small company has multiple responsibilities, and the HR functions are often added on top. He or she may be involved in a strategic planning meeting one moment and showing a new employee where the break room is the next. Often, the business manager lacks the tools, technology, skills and desire to oversee the complex requirements of HR because they’re pulled in so many directions. Unfortunately, both areas can end up suffering. Consider how your business manager’s time is being allocated and determine if it’s the best use of his or her talents and your company’s resources to help grow your business.

2. Are Employee Needs Met in a Timely Manner?

Making sure payroll and tax statements are completed on time is a given when it comes to HR. But there are many other duties that an HR professional needs to handle, especially when it comes to employee relations. Have you had an employee request help with a sensitive issue or compliance concern and had to drop what you’re doing to address it? Worse yet, did you intend on addressing it, only to get distracted by other critical duties? Meanwhile, a couple weeks have gone by and the employee is feeling ignored and increasingly frustrated.

If there isn’t a person dedicated to handle such HR issues, employee morale will diminish and word will likely spread among your workforce about how unresponsive the company is to employee concerns. A dedicated HR person will put employees first.

3. Are Employees Being Treated Equally and Fairly?

There are many best practices and regulation requirements for treating employees fairly. For example, the Americans with Disabilities Act (ADA) requires that employees with physical and sometimes emotional disabilities receive special work considerations and accessibility. Are you complying? Is one employee repeatedly reprimanded for being late while another’s tardiness is never addressed?

Additionally, some companies fail to proactively implement policies surrounding leave. For example, what happens if someone wants maternity leave or is injured? How long can they have off? Is there a policy in place? It’s HR’s job to establish standards and treat employees equally.

4. Is My Company in Compliance?

We live in an age of information, and it’s not unusual for employees in a small business to be more aware of worker rights and compliance than the employer. This can create tension and put a company at risk. Just one example is the rule surrounding military leave. The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects civilian job rights and benefits for veterans and members of the Reserve. If a service member is deployed, an employer is required to offer his or her job back upon returning. Furthermore, if others in the same position were promoted, the service member who was away during that time must also be given the same promotion. Every service member is fully aware of this requirement, but most employers aren’t, putting them at risk of noncompliance and related fines.

This is just one compliance requirement — there are dozens more that may apply to a single organization (and the rules can change on a dime). Only a dedicated HR professional can commit the time to keeping them all straight.

5. Are We Experiencing High Turnover?

The labor shortage is impacting nearly every industry, and retaining quality employees is paramount to growing a business and keeping costs in check. Poor management of HR functions can lead to frustrated workers, complaints and high turnover and continually seeking new workers (and the average cost for onboarding a new employee is $4,129). Also consider that HR professionals are in high demand and are being lured away from companies. Even if you have a dedicated HR facilitator, do you understand the processes and systems he or she established? Or will the next person have to start from scratch?

6. Do We Have the Right Technology to Manage HR?

HR is becoming more sophisticated, requiring more than just managing payroll. While softwares like Quickbooks and other payroll systems can help, they do little to document or manage employee information. The person overseeing HR needs to have the skillset to drive your organization into the future.

Employees increasingly want to manage their own information through a portal that allows them to electronically see how many vacation days they have remaining, to change 401(k) contributions, retrieve payroll documents and more. Modern HR software, such as a Human Capital Management (HCM) system, integrates payroll, compliance, employee records and the ability for employees to securely access their records at any time without having to knock on HR’s door.

7. Are We Prepared for the Unknown?

A proactive approach in business is always better than reacting when the unexpected happens. Do you have an emergency preparedness plan in place in the event of a natural disaster? What is your evacuation plan? What steps do you take when the Department of Labor shows up for an I9 audit or in response to an Equal Employment Opportunity (EEOC) complaint? The risks are far too great to ignore, and a strategic approach to HR can mitigate those risks and help you prepare for the unknown.

So, how big does a company need to be before it considers implementing an HR solution? Our helpful comparison guide below can show you additional considerations when contemplating whether to continue handling HR in-house or outsourcing it, so be sure to download it. But if you’re reading this and own or manage a business, chances are you know you need some help.

Give us a call or contact us here to talk about a complimentary HR Gap Analysis. We’ll gladly share about how we can come alongside you to remove the uncertainty and make sure your HR needs are met and that your employees are well cared for.  

In-House vs. Outsourced HR Comparison Guide

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A collection of articles from the McClone team with the helpful knowledge and insights to ensure your organization is well protected.