But being slow with HR may be harmful. Without establishing crucial rules on your organization’s structure, how you handle problems, and how you take care of your people, you run the risk of leaving your company exposed. You can wind up discouraging fresh talent or, worse, the folks who currently work for you.
Small firms simply cannot afford to have a high turnover rate. Losing employees not only lowers morale but also increases the workload on current employees, which may negatively affect customer satisfaction and ultimately affect sales. Fairness and consistency are ensured by having a defined set of corporate rules, which keeps employees with you. Companies with good HR departments have contented employees, responses to all inquiries, and the appropriate processes for when anything goes wrong.
Just like having an accountant, an HR consultant or agency can manage the trickier, time-consuming tasks, so you don’t have to do them in-house. There’s plenty of free HR advice for small businesses out there too. But whatever approach you take, it’s vital to have a coherent strategy.
To help you along, we’ve put together a handy checklist, covering the most important things to consider when it comes to HR for small businesses.
HR Checklist: An overview
You can jump to any item on the HR checklist here or read on to follow it step-by-step.
- Define your culture, mission and values
- Make sense of your organisational structure
- Ensure you’re 100% compliant
- Make your company an attractive place to work
- Put together an employee handbook
- Get a seamless onboarding process in place
- Invest in the right software
- Formalise performance management
1. Define your culture, mission, and values
The Great Resignation, where people all over the world are leaving their jobs voluntarily, remains one of the biggest issues for companies right now. In fact, almost a third of UK workers are considering moving to a new job this year.
As you get your HR function set up, one way to respond to this phenomenon is by focusing on what you stand for. So if you haven’t articulated your mission in a compelling way, make sure you do. The same goes for culture, which is a fundamental part of hiring and retention. Of course, your mission and culture aren’t things just to be ticked off a list; but if you’re looking to get your HR policies right, they’re sensible places to start.
Every business is different, but as you think about what distinguishes your attitudes and behaviors from other companies, it’s worth considering what would appeal to staff. What kind of environment do you want to create? What kind of people do you want to surround yourself with? Defining your company values is a crucial part of this process, as it’ll determine what makes your business a good place to work.
2. Make sense of your organizational structure
You’d be surprised just how many small businesses start expanding without a clear organizational structure in place. So before you get to a position where you can increase headcount significantly, make sure you’ve drafted an organizational chart, which lays out the various roles, departments, and reporting structure within your business.
Building and maintaining a good organizational structure is like potting a plant: if you’ve done things correctly the first time around, your company will grow in a healthier, more sustainable way. And like culture, mission and values, it should be a precursor to everything else. For some inspiration on what makes an accessible org chart, check out Miro’s templates, or this Powerpoint-ready version.
3. Ensure you’re 100% compliant
There are a handful of HR policies that every business is required to have in place. First, you need a health and safety policy, which is all about keeping people safe in your workplace. Visit the government’s Health and Safety Executive for everything you need to know here, including how to write your policy.
By law your business also needs a grievance policy, which gives your employees a formal way to deal with any concerns or problems that may arise (that they haven’t been able to resolve by other means). You can learn about getting a grievance procedure in writing here.
Disciplinary policies are a legal requirement too, where you ought to follow the Acas Code of Practice. It’s also worth ensuring your employment contracts are in order, which is something an agency or somebody specialising in HR consulting for small businesses can help with.
4. Make your company an attractive place to work
Compensation and benefits are a balancing act: you want to invest in compelling ways to attract and retain talent, but you’re also restricted by money, in that you can only offer something that your business can afford. So when it comes to how you reward your staff and any additional benefits on top of that, think about what’s both sustainable financially and strikes a chord with your talent pool.
It could be a catch-all solution like Perkbox, with something for everybody. Or you might go for a health insurance platform like Vitality, which has a similarly wide appeal and feels particularly beneficial, as it involves an element of private healthcare. Many businesses are investing in mindfulness-based tools like Headspace for work too, as stress, depression or anxiety now account for 50% of all work-related ill health cases.
5. Create an employee manual.
It’s necessary to consider where you stand on other crucial issues, including illness, flexible working, equal chances, and diversity and inclusion, in addition to all the must-have policies mentioned above. Many individuals value these regulations and a company’s purpose, culture, and perks.
Once you’ve reached that point, the following step is to consolidate everything so that your staff knows your company’s regulations. A live, breathing HR function that demonstrates to employees your genuine concern is possible with an employee handbook.
Avoid making your employee handbook monotonous at all costs. Create something you can be proud of that incorporates your beliefs and purpose and all of your policies and benefits. Many excellent tools are available, including templates for employee handbooks from Workable and Notion, for instance.
6. Establish a smooth onboarding procedure.
There is nothing worse than beginning a new job and feeling misled: you are left on your own; there is no onboarding procedure, and there is no clear explanation of how to get started or how things function.
Your responsibility as a company owner is to make sure that no new employee feels lost. Systems that establish the tone from day one, with adequate structure, documentation, and activities to enable staff members to make the most of their first few weeks, may help you optimize the onboarding process. They may thus start having an effect more rapidly.
Your employee handbook may be given to new hires as soon as they arrive, which is where it comes in. However, your onboarding procedure also depends on a lot more than that: introductions, work assignments, clarification of corporate goals, and granting access to the appropriate documents. You can read citrus’s own comprehensive onboarding checklist by clicking here.
7. Purchase the appropriate software.
Many of these checklist items may be simplified using readily available tools, saving you time from depending on spreadsheets or having to create anything from scratch. Small-business HR software may help you organize your data, get insights from it, and free up your staff from the administrative work associated with payroll, costs, training, performance management, and other tasks.
Since various platforms are available, it’s helpful to determine your goals before beginning. Are you looking for something more specialized to address certain issues? Or are you searching for a complete package that offers you several crucial HR software features?
8. Performance administration
In the end, staying with a firm comes down to feeling like you’re progressing. Performance evaluations and appraisals may provide a formalized development opportunity for your personnel. This can ensure that your team is working towards the proper goals. Along with one-on-one meetings, the evaluation process also ensures that staff members feel heard. Additionally, engaged employees are 87% less likely to quit their jobs.
Make sure the next actions follow each evaluation when creating your performance management framework. The staff must have the impression that something has changed due to the whole process and have access to specific data they can use to advance and monitor.
Next actions
There are many things to think about, but this checklist should give you a general idea of what you need to accomplish. Some specialists may assist with solutions that make it simpler to start with HR.
Working with an HR consultant makes launching your new rules and procedures much simpler.
Do you want to compare pricing from the top HR service providers? Use our free comparison tool to choose the best supplier that will meet your requirements.
Simply fill in our free quote-finding form, and answer a few questions about your business (it takes less than a minute). We’ll match you with the most appropriate HR support and software provider.
