One of the more difficult aspects of running a small business is wearing multiple hats from sales and marketing, to human resources, to payroll and accounting. When considered in conjunction with a recent Wells Fargo/Gallup small business survey that found small business owners work an average of 52 hours per week with the majority, 57 percent, working six days a week, one has to ask how a small business owner can maintain the momentum.
In many cases the business stagnates or worse a business closes. According the Small Business Administration only 51 percent of small business will survive 5 or more years after opening their doors.
Of all the business related task not directly related to retaining or finding new customers, hiring and managing employees is the one of the top resource and financial drains on a business owner. A 2014 SCORE.org survey of small businesses found that human resources work consumes 25-35 percent of an owner’s time with 7-25 percent of that time spent handling employee paperwork alone. Financially, according to a 2010 Small Business Administration study, regulation and compliance cost companies with fewer than 20 employees 36 percent more than larger companies.
Are you growing your business or managing your company?
Ultimately the value your company places on human resources management may dictate the success of your business. Obtaining human resource expertise to support your business can both save time and offset costs that result from bad hiring decisions, low staffing levels, and regularity fines. Whether you plan to hire or outsource, here are five questions to help you gauge your next step:
1. Am I spending too much time managing and tracking attendance, requests for time off, schedule changes, negotiating wages, managing employee benefits? Imagine how much more productive you would be if you were focusing your time and energy on growing your business. In addition, a human resource expert can look over payroll, benefits plans, workers’ compensation, and other aspects of your employment plan to spot areas where that could be improved and cut cost.
2. Do I need help administrating an employer-sponsored healthcare plan? In 2015, the Affordable Care Act required companies with the equivalent of 100 full-time employees to choose between offering healthcare to those employees or paying a tax. In 2016, this cutoff will drop to 50 employees.
3. Am I having trouble retaining or finding employees? Employees turn to HR departments as much as employers do for solutions to their problems. Employees can become frustrated when they are unable to resolve issues. HR professionals analyze employment-satisfaction, provide a safe space for employee complaints, and plan activities that strengthen the bonds between employees and their coworkers. On the flip side, recruiting new employees has its financial toll as well. According to the 2014 SCORE.org survey, 30% of small business failures are blamed on poor hiring decisions. Finding the best candidates is often a slow, tedious process during which you lose functionality and other members of your staff are forced to compensate. Cutting down on recruiting time can enhance your company’s productivity.
4. Am I spending too much time on tasks that do not need my expertise? One of the big mistakes business owners make is falling into the trap of believing that they need to be involved in every aspect of the business for it to run smoothly.
5. Do I need to invest in creating a clear set of employee policies? Although dealing with each employee issue on a case-by-case basis seams easier, you must make sure you stay on the right side of the law. Employee lawsuits are expensive. State, local, and federal laws governing employment are complicated and change regularly. Instead of struggling to keep up with the shifting regulations and the complexities of employee lawsuits, having a human resource professional create a set of uniform procedures can save you time and money in the long run.
Are You Ready to Hire A Human Resource Provider?
Usually it’s time to consider outsourcing your HR services once your administrative concerns become a drain on your time and reduces your overall productivity. Top HR tasks outsourced by businesses today are:
- Employee Relations
If the cost of your time and your internal resources focussing on HR tasks is greater than the cost of hiring a human resource provider—you should consider outsourcing your human resources.
- Work With Me, People! Statistics on Small Business Human Resource Trends
- SBA Office of Advocacy: Frequently Asked Questions
- The Sacrifices and Rewards of Owning a Small Business
- Wells Fargo/Gallup: More Than Half of Small Business Owners Work at Least Six-Day Weeks, Still Find Time for Personal Life