As small businesses start out, they often ask: when is it time to hire a human resource professional? Most of these conversations center around whether the company can afford to hire a HR consultant or employee.

The real question is: can you afford NOT to hire a human resource professional in today’s workplace environment?

In today’s work environment, liability is everywhere. You open your company up to significant risk from wrongful termination lawsuits, workplace discrimination claims, and harassment allegations without a qualified HR professional on your team. A HR professional can help protect your company and your employees with vital training, regulatory compliance, and procedures.

But What About the Cost?

Hiring a human resource professional does not have to be expensive. Although the average salary of a HR Generalist is $50,000- $60,000 per year, you can achieve similar results by outsourcing the HR functions of your company. All companies regardless of their size can afford to hire a HR professional on a contract or part-time basis to help them develop and implement effective people processes that will positively impact the bottom line.

The Business Case

Most entrepreneurs and business owners would agree that your employees are your greatest asset. How you manage your people processes can greatly affect your bottom line. The three most important questions you should be asking yourself related to your employees are:

  1. What kind of people do I need to manage and run my business in a way that aligns with my business goals?  Without these employees, you will most likely struggle to achieve your business goals. Hiring the right talent is critical in delivering services and products for your company. Developing recruiting and sourcing strategies and training hiring managers on effective interviewing and selection techniques are two approaches that contribute to success. Failure to hire the right people at the right time will result in loss in quality, delivery of service or products, customers and revenue.
  2. What programs and initiatives should I implement that will attract top talent, achieve employee retention and develop my employees? Hiring is only half the battle in the war for talent. Engaging and training key employees is critical to retaining them. Developing and sustaining a company culture is equally important. Without strategies for addressing these areas, your company may experience high employee turnover or worse, retain bottom performers who won’t move on.
  3. What risks related to my employees and employment practices might derail my initiatives and result in a potential financial loss? Even small companies do not escape the risk that employees create. Knowing what your risks are and staying in front of them is essential for minimizing financial impact and disruptions.

Ways a Human Resource Professional Can Help Your Business

A human resource professional is someone who has experience, knowledge and credentials in the primary areas of human resource management. These areas include staffing, compensation and benefits, employment compliance, training, and company culture development. The most impactful HR professional understands the company’s business goals and utilizes his/her experience and knowledge to strategically develop and implement programs to support these business goals.

A HR professional can help your business in these ways and more:

  • Conduct a HR assessment and identify potential areas of risk. Develop a corrective action plan for improving these areas.
  • Evaluate recruiting and selection processes and develop best practices for hiring the right talent. Create interviews and train hiring managers on selection techniques.
  • Develop compensation and benefit plans that attract and retain top talent and align with the company’s budget.
  • Conduct a company culture evaluation with your employees to assess employee satisfaction and company culture. Create programs and communication strategies to support and enhance the company culture.
  • Conduct management and employee training on topics such as:
    • Harassment Prevention
    • Civility and Respect in the Workplace
    • Giving and Receiving Feedback
    • Communication Strategies
    • Dealing with Conflict
    • Developing Effective Teams

An Affordable HR Plan: You Can Start With a Budget As Low As $400

Begin with a small project to outsource.  Here is an example of an affordable HR plan for a small company.

  1. Step One: Hire a HR consultant to meet with you to conduct a HR Assessment. This assessment can be completed through a series of questions that review the primary HR functions in your company. After the meeting, the consultant can provide you with a summary of their findings and recommendations. A small HR Assessment can be achieved with a budget as low as $400-$500. Larger companies or those with an identified risk may need a more detailed assessment referred to as a HR Audit. HR audits range from $3,000-$5,000 depending on the scope of services.
  2. Step Two: Once completed, you will have an overview of your HR needs and then you can identify the areas to address. Some areas that you might need assistance are creating an employee handbook, developing effective recruiting strategies, building a workforce plan, conducting a company culture evaluation, and developing a career development program. You can either take these projects on yourself or hire a consultant to work on these for you.
  3. Step Three: After the projects are completed, retain an HR consultant on a monthly basis for HR on Demand issues.HR on demand issues include calls related to employee relations, employee counseling, employment termination, workplace injury, unemployment claims, discrimination claims, and violations of company policy. You can retain a HR Consultant for a few hours each month with a budget of $350-$500 per month. A HR consultant can advise you and your management team, sharing best practices and navigating you out of troubled waters. The benefits of having this level of expertise on hand can save you tenfold in the event you have a complaint filed against you for violation of employment regulations.
  4. Step Four: Conduct an annual review of HR policies and procedures with the assistance of a HR consultant. This should include an update on the employee handbook and review of employment practices, employee issues, employee turnover and management concerns. If you hire a HR Consultant on retainer, this could be included in your agreement.

Whether you have one or one hundred employees, developing your “people processes” will contribute to your overall business success. Managing your human resource functions doesn’t have to be an enormous expense. Begin by engaging with a HR consultant and add services as your business needs evolve and your budget allows.