Does an SMB Really Need a Dedicated HR Professional?

A company with less than 100 employees has the same HR issues as any larger organization, only in smaller quantities. SMBs (small to medium-size businesses) face many of the same legal and regulatory burdens; hiring and training needs, and payroll and policy administration. But HR problems arise less frequently in a smaller company, leading many SMB managers to believe that the HR function can be shared among members of the firm without sacrificing quality or compliance.

In many SMBs, the HR function is divvied up along seemingly obvious lines. Payroll, taxes, and benefits payments are usually handled by the accounting department. Hiring, training, motivation, and performance reviews are the province of line managers. Time and attendance generally fall to the office manager. Legal and regulatory matters that require detailed expertise are often farmed out to part-time consultants. What more does an SMB need?

While all "essential" HR functions seem to be handled by a department, they are often not covered well. Recruiting, for example, is an ongoing process and not just an occasional chore. To hire well, a business needs continuous input on salaries, benefits, and other competitive metrics. Keeping employee spirits high is another area requiring constant attention. Left to a single manager's discretion, motivation and morale become utterly dependent on that manager's limited understanding of what impels people, leaving out the ever-growing body of related knowledge that a dedicated HR person can review.

When HR functions are shared among already overworked managers, there is a tendency to take risks by skimping on some legal and regulatory statutes. The phrasing of help-wanted ads may not be vetted for compliance with anti-discrimination laws, for example. Interviews may be conducted in an off-the-cuff fashion, without structured formats that help protect the company against charges of prejudice. Safety programs may be less than comprehensive. The benefits package that has always served the company may not be reviewed in light of current market conditions.

While a company may go for years without being penalized for these oversights, it will eventually face a large legal liability. A dedicated, full-time HR person who devotes his or her duties to minimizing risks is a proactive investment.

A major role of an HR specialist is competitive intelligence. What's the going rate for a mechanical engineer with five years of experience? What sort of health insurance coverage are your competitors offering? These details can be learned through constant recruiting efforts, something that part-time, two-hat HR managers don't have time to do.

Choosing the right HR solution for your business from the wide range of currently available Human Resource Management system software can indeed be overwhelming. However, it is essential to keep up with the fast-evolving technology and remove redundant tasks from your business operations. Human Resources has evolved from merely being an administrative department to the management of an organization’s people. 

As HRM has expanded its functions, it is essential to benefit from modern HR software solutions and facilitate businesses with their grown needs for human resource management. As HR software companies aim to improve and streamline all employees’ activities through a single central database, you should consider investing in one to reap the rewards of a centralized HR platform.

The right HR software system can streamline employee management and enhance collaboration among a multitude of other benefits. However, selecting the perfect software for HR requires knowledge of the key factors to look out for. Here are the features you should be looking for when comparing and evaluating different HR software programs: 

• Application Tracking features seamless integration, document management, progress reports, and multi-channel accessibility.
• Employee Onboarding with customizable onboarding workflows, multi-user access, option for self-service, and electronic forms. 
• Employee Training and Development with real-time feedback, synced schedules, and revised strategy. 
• Employee and Schedule Management comprising easy access, employee directory, reporting module, resource planning, streamlined approvals, real-time reports, and an interactive dashboard. 
• Leave Management and Payroll with an auto-update ability for leave balance, configurable fields, carryovers and overtime, secure and functionally rich interface, and omnichannel compatibility.
• Performance Management with customizable performance review templates, 360-degree feedback, and comprehensive criteria for assessments. 

Here are some of the top HR systems that you should consider when choosing an HR solution for your business:

1. BambooHR
2. Gusto
3. Kissflow HR Cloud
4. Zenefits
5. Zoho People

For an organization that values its people, seamless collaboration and streamlined operations are everything. Here is a highlight of what an HR software solution can do for you:  

• Enable you to access your data from anywhere at any time.
• Provide easily accessible automation tools in multiple languages and currencies.
• Allow ease of use on mobile devices.
• Reduce business costs.
• Enable improved data storage.
• Eliminate manual operations and dull paperwork.
• Flexible adjustment for companies of all sizes.
• Improve the overall performance of a business.
• Innovate and automate processes. 
• Easily integrate with other internal systems.
• Provide a well-designed and easy-to-use user interface.
• Offer an organized, visually appealing, and centralized dashboard.

Many small companies with 50 or fewer employees, which are not in growth mode, can get by sharing HR functions among existing employees. But most businesses plan for expansion, and rapid growth especially requires a focused, dedicated HR manager.

The risks of non-compliance and being less than competitive apply equally to small companies and large ones. The intelligence provided by ongoing, full-time recruiting efforts is worthwhile for a company.

Reliance on outsourced payroll, benefits administration, and other HR functions can cost more than a full-time HR professional. And these outsiders often don't know any more about your company than you have time to tell them. An in-house HR person is familiar with your employees and can address their needs much better.

In general, the time to hire a full-time HR professional is whenever your firm wants to treat employees as its most valuable asset.

For more information on HR, consult the HR Resource Center, where you'll find comprehensive research, community-contributed content, and advice from Focus Experts.