Business Consulting / When You Have an HR Department of One

When You Have an HR Department of One

At a minimum, the human resources department handles:

  • Recruiting.
  • Hiring.
  • Compensation.
  • Employee benefits.
  • Training and development.
  • Employee relations.
  • Employee engagement.
  • Employee retention.
  • Health and safety.
  • HR compliance.

To save money, many small-business owners tackle these employment activities on their own, only to learn that the company is better off when they focus on revenue generation.

According to SHRM, businesses with fewer than 20 employees are better off delegating HR responsibilities to someone within the company.

Is one HR person enough?

A 2018 report by Bloomberg Law suggests that the ideal ratio is 1.5 HR people per 100 employees. But technology and outsourcing may soon drive down the need for more HR staff members.

Where only one HR person is needed, the practitioner is often the HR manager, who does a bit of everything related to HR — except payroll, which is usually outsourced to an external provider.

Do you have the right HR person?

Once you’ve established that you need only one HR person, you must secure the most qualified person for the job.

Ideally, you want someone who understands what goes into managing the HR function for a small business and has the necessary competencies. This includes not just expertise in HR administration but also people management.

Do you have your HR priorities straight?

Based on survey results presented at the SHRM 2019 Annual Conference & Exposition, these are the top five priorities for an HR department of one:

  1. Employee engagement, such as retaining high-performing employees, managing performance and fostering an energizing culture.
  2. Talent acquisition, such as enhancing recruitment processes and decreasing time to hire.
  3. Leadership, such as carrying out key HR initiatives in order to gain credibility as a strategic business partner.
  4. Communication, such as utilizing new-hire onboarding to break down communication siloes early.
  5. Business acumen, such as having strong knowledge of the business in order to make informed and timely decisions. This includes an understanding of finance, sales, marketing, operations, and the business’s industry and competition.

HR priorities typically vary by employer and can be influenced by internal and external conditions.

How can you maximize efficiency in an HR department of one?

Take advantage of resources that help solo HR practitioners decrease their workload and deliver quality HR services. For example, HR technology reduces manual labor, simplifies workforce management, enhances the employee experience and improves HR compliance. It will be necessary to build internal policies and procedures that facilitate smooth-running HR functions.

Solo HR practitioners can benefit from joining reputable HR organizations and expanding their network — both of which are vital to connecting with other industry professionals and keeping up with HR trends.

Don’t overlook federal and state agencies, including the U.S. Department of Labor, that offer HR-related resources to new and small businesses.


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