Small Businesses Have Big HR Needs - National Post

Where there are employees – be it 14,800 people, 710 people or 43 people – there are HR issues. Most mid to large sized organizations have a Human Resources Department with a number of HR professionals typically covering off most HR functions. Conversely, most small businesses do not have an HR professional at all.  Some do opt to have a junior generalist who fulfills some HR functions such as payroll and recruitment. But what about all of the other HR functions?  Big HR needs do exist in small companies, but what is the best approach to addressing them?

HR functions such as designing performance management systems, developing talent management strategies, creating compensation plans and preparing for terminations are best handled by senior HR practitioners. But there are few seasoned HR professionals want to work in small businesses where they would be the only HR resource and therefore would need to do the highly administrative and more tedious aspects of HR. As well, companies who have 100 employees or less would not be able to keep a truly senior HR professional busy and challenged 5 days a week, let alone be able to afford them. 

The director of a private clinic expressed his frustration due to the absence of an HR professional, “it’s crazy, I’m not a big corporation, but I have human resource needs too but I can’t afford to have an HR person on my staff”. So how do small businesses best deal with big HR issues if they don’t have a senior HR exec? By partnering with external Human Resources Consultants. 

The rationale for this model is that it costs much less for the small business owner and it is the best way to get senior HR expertise on an ‘as needed basis’. This model isn’t groundbreaking. In fact, many small companies adopt this same practice with their finance, marketing and IT needs. The more revolutionary aspect of this model is that an increasing number of small companies are realizing that human resources needs are crucial to success and cannot be overlooked. 

In one particular case, the client bragged that despite the fact that his company is so small, it has a policy manual and employee benefits. This is great except for the fact that when it came to recruitment, he had no idea that there were prohibitive grounds under the Human Rights Code. That is, he didn’t realize it was illegal to ask about people’s age, marital status etc.   Small businesses can’t afford to make mistakes when it comes to things like employment standards and laws. Throw in the need for hiring the right talent, motivating them and ensuring they perform in their roles and it’s easy to see how an HR consultant can add a lot of value. 

When filling this HR need, small businesses should look for someone who best suits their organization’s culture and values. Performance reviews, recruitment strategies, the way terminations are handled – these are all processes that require careful representation of the organization. Searching for the right HR consultant should involve thorough reference checks to learn how the consultant conducted themselves, whether they represented the company appropriately and of course to determine whether they had the desired impact. Speaking with other small businesses in your network is a great way to find out who is out there in terms of HR consultants and how they’ve met and hopefully exceeded the needs of a company your size.