Written by Stephen H. Murphy
Why Even Small Businesses Should Invest in HR
Why is HR important? Good question. A potential client once told me they didn’t have a human resources (HR) function and didn’t need one. I thought this was a strange comment, given the fact he had 300-plus employees in three states. When I asked what he was doing to manage the financial costs of employing people—i.e., workers comp, unemployment, overtime, etc.—he said that high costs in these areas were “just the cost of doing business.” After hearing that, I didn’t bother to ask about compliance, benefits costs, legal issues, or anything remotely proactive when it came to managing his workforce… I knew what his response would be. He had no idea what HR could do for him; he considered HR as an expense that provided no return. Needless to say, he didn’t hire my company to help him manage his HR function. I found out a couple years later that the business had closed; I suspect his lack of attention to HR may have had something to do with the closing.
Please know that every employer has HR administrative, legal, and employee relations responsibilities and liabilities. Large companies almost always utilize some form of HR (internal or outsourced), but small companies oftentimes go without. If you are a small employer and don’t have HR support, you run the same risks as the potential client I mentioned above. So before you decide you don’t need or can’t afford HR support, please consider the following.
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