For small businesses already occupied with sales, project management, day-to-day operations, and managing employees with multifaceted roles, HR often falls to the bottom of the priority list. Some CEOs handle HR responsibilities directly while other small businesses choose to delegate the tasks to an office administrator or another staff member. In both cases, this is rarely a lasting solution without proper training, additional staff support, and a payroll partner who can streamline or automate important HR processes. In this article, we’ll explore the best methods for delegating and managing HR within your small business.
Delegating for Efficiency and Talent Allocation
Although advice abounds regarding when to hire an HR manager or delegate HR responsibilities, the general rule is to delegate HR tasks once your business has grown to incorporate 10 or more employees. This is especially true if a CEO has been handling HR responsibilities prior to this point. The logic here is simple: a CEO’s time spent on HR detracts from time spent on key business tasks that focus on growth and specifically require the participation and expertise of the CEO to succeed. Similarly, if HR has been handled by an office administrator or other staff member who is untrained or only occupies the role in a supplemental way, it’s time to formulate a new and more sustainable approach.
Regardless of whether a CEO or an office administrator is in charge of HR responsibilities within a small business, recent studies reveal that 81-82% of these de facto or “ad hoc” HR managers lack confidence in their HR skills and do not possess any formal HR training.
Avoiding the De Facto or Ad Hoc Approach
It’s incredibly common for staff members within a small business to occupy multiple roles or carry multiple responsibilities at once. Adding the demanding role of HR manager to an employee’s plate without a clearly articulated plan to help them succeed could be an accident waiting to happen. This issue is entirely avoidable when a business prioritizes finding the right employee, providing educational resources, and granting them the support they need to succeed.
Soft Skills + Training
When choosing a potential in-house HR manager, start by identifying an existing employee with promising soft skills (empathy, listening skills, organization, interpersonal boundaries, and an ability to help others grow) and then focus on training and education geared towards developing their role as an HR manager.
Most states offer technical assistance and coursework in human resources and human resources management, but private programs exist as well. These courses will not only help your future HR manager hone their soft skills, develop greater emotional intelligence, and work on conflict resolution, but also bring them up to date on the latest regulations and best practices for any required administrative responsibilities.
Keeping Leadership in the Loop
For small businesses whose CEOs have historically handled HR tasks, this delegation of HR responsibilities can (understandably) be both a relief and a source of concern. Still, it’s important for CEOs to remember two things. First, by relinquishing singular control of HR management, they are now free to dedicate more time and energy to growth-oriented tasks within the business. Secondly, they will still participate in key hiring decisions that majorly impact the company’s future regarding workforce. The best solution is to strike a happy balance between keeping leadership in the loop while trusting your human resources manager or HR team to handle the most essential day-to-day HR tasks. Along the way, many CEOs still benefit from participating in even basic HR training, which prepares them for future hiring, termination, or conflict resolution scenarios.
Avoiding Penalties and Finding Scalable Solutions to Support Company Growth
Another obvious upside of delegating HR is that you are infinitely more likely to avoid sizable penalties and fines in the event of non-compliance. By choosing an employee with the right skills, offering the necessary training, and supporting them with a qualified payroll service, small businesses significantly increase their chance of avoiding legal complications that could sideline core business development.
The other benefit of delegating HR is that your business begins a pattern of regularly evaluating HR and workforce concerns as a business practice. As your business grows, your HR needs will evolve in tandem. This could eventually mean hiring a full-time HR director, hiring additional HR staff, or outsourcing for HR support.
How Payday Supports Small Businesses with HR Delegation
Even if your small business has determined which employee is best suited to inherit new HRM responsibilities, it’s wise to offer them comprehensive support. Alternatively, if you’re more inclined to “outside hire” a full-time HR manager, there are many considerations to keep in mind. Navigating federal, state, and local labor laws while streamlining payroll, benefits, time & attendance, and more can be a daunting task for even robust HR departments at larger companies.
Payday offers the expertise, guidance, and software necessary to help your HR department streamline all of its human resources management tasks, including payroll, hiring, legal compliance, performance management, and benefits solutions. Ready for us to start integrating and customizing HR solutions that meet your business needs? Contact us today to start our collaboration.