Share it

5 Ways Human Resource Management Will Be Useful for a Small Business

Connected relationships vector illustration

The driving force behind any successful business is its human resource. We are talking about the people who do the physical and mental work. The ones who ensure that all the processes are running as they should. 

To get optimal results from its employees, a company needs an efficient human resource management. There has to be someone that will be in charge of its most valuable resource. The HR team deals with recruiting, retention, compensation, and employee welfare. 

Some people will question whether a small business requires human resource management. We would say yes, depending on the number of employees. In fact, most experts taper the number of HR professionals you need based on how many employees you have. If you are running the company with one partner, then no, you don’t. 

However, the definition of a small business is one that hires anywhere from 100 to 1,500 employees. Now, as an entrepreneur, imagine trying to manage all those people. All while taking care of other aspects of the business. 

Without a doubt, that would be the ultimate definition of biting off more than you can chew. You need people with the right skill set and training to manage the workforce. 

This article explores the benefits of human resource management for small businesses. 

1. HR Manages Recruiting, Onboarding, and Retention 

Achieving success requires having the right talent on board. Yet, it can be a real struggle for organizations to get the right people. HR has to sift through many applications to narrow down to the best candidates. 

After that comes the interviewing process. The process can be time-consuming and expensive. The good news is that technology has provided a fantastic solution. AI in talent acquisition recruiting has eased some of the challenges the teams face in finding talent. 

The term AI recruiting refers to computer applications that have artificial intelligence capabilities. Composing your Ai recruitment technology requires feeding it with the correct data. 

AI recruiting helps remove the element of bias. This is a major stumbling block in finding the right talent. The software uses this information to develop algorithms to find the best candidates. Instead, it bases the candidate’s search on qualifications, experience, or level of education. 

After finding the right candidate comes the onboarding and training. HR must ensure a smooth transition for the recruit into their position. 

2. HR Plays a Critical Role in Employee Retention 

Finding the right talent is hard enough. The next challenge is making sure that they stay. High turnover rates are indicative of a problem within the organization. And, the cost implication for the business is huge. 

Did you know that it takes about 24 days at $4000 to hire a new employee? If the company loses ten employees within the year, that translates to $40,000 off your bottom line. 

HR has the critical role of creating a conducive work environment. They must ensure optimal engagement. The teams must have an ear to the ground to uncover any issues that may lead to high turnover. 

It is a fact that HR wears many hats. These include motivator, detective, counselor, brand ambassador, and peacemaker. Others are risk managers, analysts, strategists, and influencers.

These skills are essential for managing employees and turning them into productive teams. 

3. HR Ensures Compliance with Regulatory Requirements 

There are regulatory requirements the company must adhere to. Labor relations or rules safeguard the interests of the human resource. 

The U.S Department of Labor has guidelines on the major labor laws. These cover wages and hours, health and safety, workman’s compensation, and employee protection. 

HR management ensures compliance with these requirements. Companies that do not comply may find themselves facing penalties or steep fines. A disgruntled employee may decide to file a lawsuit. All these will have a significant impact on the company’s finances. 

That’s not all; there could be reputational damage if word gets out. The company could lose business. And, it could be hard to find employees. 

4. HR Manages Compensation and Benefits 

Retaining employees means offering fair compensation and benefits. It is true that a small business may not be able to compete with the bigger ones. The latter can give more attractive payment packages. That is why HR management must determine what is fair. 

Although the company may not be able to offer huge salaries. HR can put in some benefits that could motivate their employees. These include bonuses or incentives like paid holidays, health insurance, and allowances. 

Up to 60% of employees say that benefits significantly contribute to job satisfaction. Recognition, perks, and higher job titles, even without a raise, are as effective as higher pay. 

Company-wide acknowledgment of a job well done is more important than a $500 bonus to one-third of employees. It is the job of HR to use such insights to build motivation. It will result in higher productivity amongst employees. 

5. HR Keeps a Pulse on the Job Market 

As we said above, some of the hats that HR wears are strategist and detective. HR must know what is happening in the job market. And this would require some sleuthing to understand what competitors are doing for their employees. 

Employees leave for various reasons. You could offer them excellent salaries, yet, they will go to the competitor for less. It could be because the work environment is better there. 

It could be that your company relies on manual processes that are time-consuming and tedious. While the competitor has invested in technology to make work easy. That means greater efficiency and fewer chances of burnout for employees. 

Lack of professional growth can also be an issue. Up to 70% of U.S respondents say that they will leave a company that does not invest in their growth. 79% of employees will turn down a high-paying job if there is a lack of care or respect from the employer. 

It is the job of HR to know what is happening out there. They can then use these insights to strategize and improve the work environment. 

Final Thoughts 

Human resource management is the oil that keeps the machine parts running smoothly. They hold the most valuable resource to a company in their capable hands. And, that is their employees.  

HR finds the right talent to get on boards, trains these talents, and creates a conducive work environment. They are in charge of benefits, salaries, health, and safety. They also protect the organization by ensuring compliance with regulatory policies. 

Without a doubt, the HR team has their hands full.

Share it


Related Posts


Don't miss out on your next career move. Work with Apollo Technical and we'll keep you in the loop about the best IT and engineering jobs out there — and we'll keep it between us.


Engineering and IT recruiting are competitive. It's easy to miss out on top talent to get crucial projects done. Work with Apollo Technical and we'll bring the best IT and Engineering talent right to you.