What Are the Different Methods of Small Business Human Resource Management?

K.C. Bruning
K.C. Bruning
Businesswoman talking on a mobile phone
Businesswoman talking on a mobile phone

Small business human resource management (HRM) can be handled internally, externally, or with a combination of both methods. Which solution to pick depends upon the size, financial resources, and prospects of the business. This can be determined by creating a human resources strategy, which can be adjusted over time according to the needs of the company.

General small business human resource management may be handled by the business manager or an administrative employee. This can include a few tasks or everything from payroll to employee development. If the company grows, these duties will usually need to be transferred to either a designated HR employee or an outside contractor.

Some aspects of small business human resource management are frequently outsourced. Many small businesses use a payroll service to ensure that employee checks are timely, have the appropriate taxes removed, and are otherwise accurate and legal. A small company may also outsource tasks that don’t need to be completed very often, such as recruiting.

One of the first tasks of small business human resource management is to determine what kinds of HR issues the company in question must handle. The major tasks of human resource management typically include payroll, benefits, and staffing. Some businesses also handle the training and development of staff. Other essential tasks include on-boarding and off-boarding employees, managing employee relations, and setting and enforcing employee guidelines.

Once it has been determined which HR tasks are essential to the company, a strategy can be developed which considers the possible solutions for each issue. This includes determining whether or not to use outside resources or, if a small staff will handle HR responsibilities internally, delegating specific tasks. The strategy also involves finding the best solution for each task and ensuring that all HR processes work well together. This plan may need to be periodically re-evaluated as the company changes.

In very small companies, the business manager or owner will often manage HR duties. Some administrative employees in small businesses will handle a wide array of responsibilities, including HR. In other cases, it may make sense to outsource a few essential human resource management tasks in order to free up enough time for employees to grow the business. It is essential that whatever method of small business human resource management is used, that it be flexible enough to be changed as the business changes.

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