Human Resources - HR 101

Definition of a Human Resources Department and its Role in Small Business

A human resource (HR) department is a necessary and beneficial part of your company, even if you are a small business. Human resources is the link between the human needs of your employees and the executive needs of your company. However, as a small business, you don’t have thousands of dollars to spend on an HR consultant and you probably don’t need a large HR department to handle your small number of employees. So what are the basics of a good HR department?

A human resources department, whether big or small should have 4 goals it should focus on. Here are its overall goals:

Planning for the future

A good HR department recognizes where the company could use more help, writes a description of the jobs that need to be done, and develops the job requirements for that position. This helps a company grow.

Attracting employees

The HR department should begin compiling a candidate pool for job openings. This is done online, at job fairs, or in other ways. It should also be active in the application, interviewing, testing, background check, and job selection process.

Developing the work environment

The HR department is in charge of new employee orientation as well as routine training of current employees. It should establish a formal feedback system so employees can learn and grow.

Retaining employees

A good HR department is a mediator between the employees and the management. It handles labor relations and unions, career counseling, safety and health training, absenteeism and tardiness problems, employee benefits, and harassment and discrimination complaints. It also plays a major role in the firing and laying off of employees with everything from severance pay to retirement for older employees.

What is your small business required to have?

We have discussed the role of a good HR department. Even though your company may not have a dedicated task force for this role, there are certain things mandated by state and federal laws that HR should be aware of for their company.

Employee documentation – here are some things HR is required to document for employees:

  • I-9 federal form stating your employee is eligible for work in the United States
  • Employee file - containing the employee’s resume, W-2, W-4, contracts, payroll information, benefit programs, and employee evaluations
  • Employee Medical File – must be stored separately and securely, likely in a locked cabinet. It should include insurance information, medical examination results, doctor’s notes and notices, and any disabilities forms

Employee Handbook

You are obligated as an employer to alert the employee to his or her rights, to inform them of your company policies, and notify them about important benefits and insurance needs. This should all be covered in a comprehensive employee handbook, which might be reviewed during a new employee orientation session. Here are some important things that should be covered:

  • Equal Opportunity Policy
  • Policy against Harassment and Discrimination
  • Non Disclosure/Conflict of Interest Statements
  • Computer Use Policy
  • Social Media Policy
  • Alcohol and Drug Policy
  • Personal Appearance Policy
  • Employment Categories
  • Work Hours
  • Timekeeping Procedures
  • Paydays
  • Pay Deductions
  • Tardiness Policy
  • Workplace safety
  • Employee Conduct and Disciplinary Policies
  • Leave Policies
  • Paid Time Off
  • Holidays
  • Workers Compensation Insurance
  • Healthcare
  • 401K and Other Benefits
  • Disclaimer that handbook is not a contract of employment

Workplace Notices

You are required by law to post certain notices on posters visible to your employees which outline certain rights and safety requirements. You can find pre-made posters online to place around your job site so that you are in compliance with the law. Each state has different requirements so be sure to research what is required of your business.

Human resources is responsible for maintaining a good relationship with your employees. This means fulfilling the needs of the company, while still listening to and helping your employees with their necessities and concerns. HR is about establishing trust between the business and employee and making sure that a good workplace environment is established. An HR department should be beneficial to your company, not a burden.

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