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Best HR Practices for Small Businesses

When a firm is tiny and everyone wears numerous hats, it’s tempting to delegate HR duties so that you may focus on other things. People, however, are the most valuable resource for any firm, especially a small one. That means you can’t afford to cut corners when it comes to human resources. This article discusses why human resources are vital, what role it serves, the several HR pillars, and some HR best practices for managing your people strategy.

Best HR Practices

What Is the Importance of Human Resources?

Managing employees takes effort and requires certain abilities that many business owners lack. When it comes to beginning a business, most executives are focused on getting the company off the ground. There just isn’t enough time to cope with the day-to-day demands of people management as the company grows.

Unfortunately, some businesses learn the hard way that disregarding your HR strategy may be a costly error, given HR plays such an important role in any business (whether you know it or not). Bad hiring procedures, poor benefits administration, more turnover, poor corporate loyalty and image, and a toxic work environment are all hazards of ignoring HR strategy. On the other hand, for many small organisations, a thorough human resource management plan can be a useful competitive advantage. 

What Is HR’s Primary Function?

Human resources (HR) is in charge of managing and developing an organization’s workforce. This includes a number of elements, including:

  • Recruiting, tracking, and hiring candidates
  • Orienting new employees
  • Payroll
  • Benefits
  • Dispute resolution
  • Observance of labour laws and safety standards
  • Development and training
  • Employee involvement is important
  • The corporate culture
  • Dealing with legal issues

When you consider other HR duties like mentoring managers, workforce planning, and overall business strategy, the list of HR tasks can easily grow beyond this. But, when it comes down to it, what is HR’s primary function? At RisePath, we think it is important to assist individuals in doing an excellent job. Your HR initiatives should be geared toward that end goal. Keep in mind that there are multiple categories (or pillars) that represent various HR focuses as you strategize.

What Are the HR Pillars?

In today’s workplace, being an HR professional looks different than it did in the past. The function has evolved to encompass more strategic obligations, such as promoting a strong workplace culture, in addition to typical HR activities like onboarding and offboarding.

In today’s business, juggling the numerous HR obligations might be difficult. Prioritizing where you spend your time and effort is especially important for small enterprises. Keeping an eye on the HR pillars listed below might help you stay on track:

  • Recruiting & Hiring
  • Onboarding/Offboarding
  • Culture
  • Administration of Benefits
  • Compensation
  • Performance
  • Workforce Planning
  • Legal Requirements

Without the right tools and strategy in place, keeping up with the demands of each pillar may be a difficult undertaking.

Human Resources for Small Businesses

Is it ever the case that for every item you cross off your to-do list, two more arise out of nowhere? As a small-business HR professional, your work can feel never-ending—always there’s something more you can do to improve your company. That’s why it’s critical to follow HR advice and ask what you should do rather than what you can do.

We’ve compiled a list of some of our top HR recommendations for managing each key aspect of your career to help you focus on the most vital responsibilities. 

HR Suggestions for Managing Employee Data

Automate the storage of your data.

The day-to-day functions of HR take a lot longer without a mechanism to efficiently track, update, and store people’s data. Filing cabinets or spreadsheets are better than nothing, but they waste a lot of time due to missing documents and security issues. There’s no better way to keep your HR data safe and organised than with an HRIS.

Encourage employees to serve themselves.

Make sure the HRIS you chose includes employee self-service. This feature allows your employees to update and access their own personal information and preferences without having to come to your office. If your HRIS currently includes this feature, make sure you’re encouraging your staff to use it. 

Use HR reports to their full potential.

Reporting becomes a lot easier once your data is organised and accessible. Easy reporting is wonderful news for HR teams, especially because nearly one-third of executives in a recent RisePath survey said they desire more regular updates on human resources data. An HRIS gives you faster access to a wealth of information including turnover, demographics, and more, all of which can help your company make more educated strategic decisions. It’s only a matter of tapping into it.

Tips for Recruiting Top Candidates via Human Resources

Reduce the number of steps in your hiring process that aren’t necessary.

In today’s employment environment, getting the top prospects for your company takes time. Examine your hiring process carefully and determine whether each stage is genuinely necessary. Taking on the role of a candidate and applying for a position in your business, complete with numerous rounds of interviews and a final offer, is an excellent approach to acquiring a fresh perspective on your process. This will allow you to get a sense of how the candidate feels.

Make the candidate experience a top priority.

You don’t just want to get things done quickly; you also want to provide candidates with a great experience, whether or not they are hired. Candidates who become new hires as a result of a positive hiring experience are more likely to stay and become engaged employees. Those who aren’t employed, on the other hand, will be more likely to advise their friends and relatives to apply or to apply again themselves if they have a favourable experience.

With an ATS, you can get things done faster.

Using an applicant tracking system is one of the simplest ways to make your hiring process more efficient—and hence give a better candidate experience.

During the recruiting process, there is a lot of data to keep track of, from applications and resumes to interview notes and offer letters. Keeping everything organised by hand may be a significant time sink for HR, and a single misplaced document might stymie your hiring process. An applicant tracking system, on the other hand, can help you manage candidate information, improve communication, and more.

HR Advice for Successful Onboarding

Before the first day, take care of the documentation.

New hires who have just completed the hiring process are usually ecstatic and enthused to begin their new employment. You must make the most of each new hire’s first day to capitalise on their enthusiasm. This entails introducing them to teammates and management, laying out their job responsibilities, and ensuring their success.

Recognize what new hires expect from onboarding.

Remember that, as much as an efficient onboarding process benefits your company, it should equally benefit the new workers who are going through it. Do you have a good idea of what your new hires expect from the onboarding process?

According to our research, the majority of new hires want on-the-job training, an overview of the company’s policies, a review of administrative procedures, and a buddy or mentor allocated to them. Try conducting a survey of new workers after they complete the onboarding process to see which aspects they value the most and which you might need to change.

Incorporate culture into the decision-making process.

When a new employee joins your firm, you’re not just asking them to do a job; you’re also asking them to embrace and contribute to the culture. This means that as well as technical training, on-the-job training should incorporate cultural training. 

HR Compensation Management Tips

Make a decision on a strategy.

When you have a strategy in place, it’s easier to make compensation decisions. Your strategy should fall into one of three categories at its core: lag, match, or lead. This means that your company can pay below market value (lag), at market value (match), or above market value (overpay) (lead). While each has advantages and disadvantages, matching market value is the most consistent technique for keeping staff happy and attracting people who want to work for you (rather than those who are just after the highest salary).

Discuss your strategy in an open and honest manner.

Of course, the communication that surrounds a compensation strategy is only as good as the approach itself. In other words, if your company never explains its compensation policy, employees won’t assume they’re being adequately compensated. 

A study discovered that employee attitudes toward their company’s pay philosophy and method have 5.4 times the influence on happiness and engagement as the actual figures on their paycheck. In a nutshell, communication is crucial.

Take into account all factors of compensation.

It’s critical to think about compensation in broad terms when communicating your company’s pay philosophy and plan. It includes an employee’s salary, as well as benefits, paid time off, perks, and other advantages. Compensation refers to the entire amount of money you pay an employee in exchange for the value they bring to the company. By adding the concept of this entire reward into your communication, you may assist employees to have a more positive opinion of your company’s compensation approach.

HR Performance Management Suggestions

Increase the frequency with which you discuss performance.

Annual performance reviews are being phased out in favour of less formal, more frequent performance talks in an increasing number of firms. If your company hasn’t yet joined the bandwagon, now is the moment. Managers and staff benefit from more frequent performance evaluations because they may address current events and receive more relevant timely feedback.

Make performance evaluations easier to understand.

50-question surveys that take hours to complete bog down performance management. You must make the performance management process straightforward and accessible to keep employees and supervisors engaged. Rather than feeling like another hurdle to jump through, it should feel like an opportunity to provide concise, sincere feedback.

Conversations on compensation and performance management should be kept separate.

Compensation is often linked to performance in many organisations. While this isn’t necessarily a bad thing, discussing compensation and performance at the same time can skew feedback’s accuracy and honesty. Employees may do or say anything to “earn” more money, and managers under budget pressure from above may tone down a positive assessment in order to avoid awarding a raise. Employees and managers can discuss performance openly without the extra burden of compensation decisions if these talks are kept separate.

HR Suggestions for Creating a Positive Workplace Culture

Define the basic values of your company.

A solid foundation is the foundation of a positive, long-lasting organisational culture. This foundation should be built on well-defined values, which should guide every decision your company and its employees make. There are seven basic beliefs that characterise a culture:

  • Be open-minded.
  • Consider the Best Case Scenario
  • Make the Correct Decision
  • Make a Difference
  • Developing from Good to Great
  • Take the initiative from where you are.
  • Enjoy your life’s quality.

Staff at every level of the organisation should understand, embrace, and demonstrate these principles, which aren’t just nice posters on the wall.

To foster the correct culture, use rewards and recognition.

You need to back up your selected principles and the correct business culture with awards and recognition if you want your workers to truly embrace them. Your employees will feel a conflicting message if your company claims to favour quality over quantity but pays the employee who makes the most phone calls. 

Rewarding and recognising achievement that resonates with your corporate culture, on the other hand, reminds employees that it’s more than just talk.

Seek feedback from employees to identify any misalignments.

Unless your company is brand new, you probably already have a company culture. You might even have core beliefs and a recognition programme to back them up. Culture, on the other hand, isn’t a one-shot deal. As senior employees leave and new ones arrive, you must keep a careful eye on the evolution of your company culture. Check-in with your people on a regular basis to learn about their experiences in order to keep your culture consistent and healthy. 


These pieces of HR professional advice should get you started on the components that are most vital to the success of your company. Managing HR, particularly in a small firm, can be daunting at times, but take a page from RisePath‘s playbook: Choose, concentrate, complete, and repeat. Choose one thing to concentrate on, work on it until it is complete, and then move on to the next priority. You’ll eventually show that to-do list who’s the boss, and your company will benefit as a result.

Christine Lee

Christine is a former HR manager from Fortune 500 tech companies and has managed hiring, compensation and benefits, and payroll responsibilities for multiple companies.

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