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HR for small businesses: How to set it right

Picture of Thao Nguyen Le

Thao Nguyen Le

Thao Nguyen Le is an Associate Marketing Manager at Grove HR - an emerging HR solution for SMBs powered by KMS Technology. She is an out-of-the-box thinker who is willing to take on new challenges and execute new ideas and is in charge of content production, social media awareness, and brand building.
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HR is not anymore a pure support and back office role in companies.  Effective HR management at any organization determines the level of success the company gains. Big organizations understand that the role of HR has evolved from just handling recruitment and payroll to being responsible for employee development, satisfaction, company growth, and maintaining a healthy company culture. Therefore they have invested resources into having the right HR team and software that facilitate the business growth.


As a small business that can’t afford to break the bank for the HR department alone, here are 5 ways you can effectively manage your HR operations.


Establish a solid HR foundation


Laying a strong HR foundation is the first and foremost step to effective HR management. Start by making sure that your business is in compliance with local, state and federal laws. Employment contracts, compensation plans, payroll, insurance and taxes are the things you need to get in place, strictly.


Next, setting up company policies from employee handbook, overtime rules or code of conduct to protect the sake of both company and employees. Be consistent in the implementation and keep the policies accessible and up-to-date to ensure all employees are well-aware and act on the mutual benefits.


Recruit smartly and onboard smoothly


One thing you can’t afford as a small business is to make unnecessary hires. When it comes to bringing in new talent, the onus is placed on bringing in quality talents that are dynamic enough to fit into multiple roles.


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As a small business, your team can determine the success of the company. It is advisable to hire a candidate who is a good fit culturally and professionally. However, be prepared for competition with larger organizations over talents. Impress your candidates with professional job descriptions, a well-structured careers page and an efficient hiring and post-hiring process.


 That’s where the importance of onboarding comes in.


After selecting the perfect hires, the HR team needs to prepare them ahead of their first day at work. By using an onboarding checklist, you can easily set the new hire up for success by organizing and following onboarding tasks like giving them a tour of the office, providing the new hire with necessary tools and materials, and introducing them to the team.


Build an amazing company culture

Industry leaders have repeated time and again that building an employee-centric culture is key to the success of any company.


Poor company culture can lead to burnout, absenteeism, disengagement, etc. But a healthy company culture results in growth and increase in revenue, employee satisfaction, increase in morale, happy customers, and a better employee retention rate.


You can build a healthy company culture by learning from the best. For example, Google, Apple and Netflix encourage creativity, ensure employee transparency, set core values, provide financial support and enable company mobility. While Amazon fosters a performance-driven environment by encouraging people to innovate continuously.


No matter what company culture you aim at, it’s important to be vigilant and take action if you notice signs of toxic culture such as competition over collaboration, high turnover rate, micromanaging and extreme criticism.

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Foster a strong relationship with employees


It is the duty of the HR department to ensure that the employees are not only engaged at work but that they are also satisfied with their work. This can only be achieved by building a relationship with them, getting to know each employee and having clear communication with them.


To build a relationship with your employees you should;

  • Implement an inclusive company culture that seeks to engage employees in the workplace.
  • Have transparent communication with your employees. Let them in on the company’s goals, direction, and objectives. Communicate to them how they can grow and help the company grow by aligning their personal goals with its goals.
  • Spend time to know each employee, they shouldn’t just be a face in the crowd. This level of commitment to your employee will help build a sustainable and healthy relationship and increase their trust and willingness to work for you.


Empower your team to perform and grow


It has been established that a core duty of the HR department is to ensure that the company is making progress and growing in the right direction. For the company to be productive, its employees must be productive, and to figure out if the employees are performing at their best, a performance review needs to be carried out.


Performance reviews help you determine which employees are performing as they should, which employees exceed expectations, and the ones that are below expectations. In today’s world, more and more businesses are shifting from traditional performance evaluation to agile practices that drive employee productivity.  Employee’s performance isn’t rated solely on their scores, but also by reviews from their colleagues, their progress and contributions. By focusing more on their individual performances in relation to the team’s, you’d be creating an avenue for them to develop and improve together as a team.

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Final thoughts


Managing a fast-growing team in startups is nothing like that in big organizations. A misstep in HR operations can be costly for the whole company.


First establish a solid HR foundation so you can go on to recruit and onboard the best talents that’d fit perfectly into the culture you’ve created at your company. Fostering a strong relationship with your employees and empowering them to perform and grow together. By implementing these steps, you will have solid HR operations facilitating your sustainable growth.

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