Small businesses generally employ less than a hundred people. This number is not insignificant and professional human resource management activities will help in streamlining the HR function of the business.
Human resource management includes the physical and mental labor contributed by the work force for the production of goods and services in the business. Research reveals that finance and accounting and marketing functions take precedence over human resources in small businesses. A significantly lesser number of small businesses have full time personnel managers to oversee all the human resource functions of the business.
Human resource management typically involves the following functions:
- Verifying the staffing requirements of the business- small businesses often have a very small number of employees. It is only as the business expands that the staffing needs increase. It is for the personnel manager to verify the kind of personnel to recruit and the best method to find the right people.
- To outsource from contractors or hire full time employees-Many small businesses prefer to get smaller jobs done through contractors who have contract labor. This is particularly true in the initial stages of the business. As operations expand, the business owner has to decide whether he would like to continue with his contracting arrangement or opt for recruiting full time employees, a task which the personnel manager can assist in.
- Training the employees for the business-every business has specific requirements and new employees need to undergo a period of training to get to understand their job fully. The human resource division formulates a training program for the new recruits and helps them undergo a proper training program, which may include a stint in other divisions to get a good over view of the business.
- Rewarding the best employees- One effective method to fight high attrition rates and making employees stay, is to devise good rewarding strategies for the best employees. The rewards program provides employees the impetus to work harder and better, and all of them will aspire towards excellence in their jobs.
- Adopting best practices in the business to retain talent- The small business should also attempt to stay at par with other businesses in its field of specialization and adopt all the best practices used by others to keep employees happy. If they are already getting the industry’s best rewards, they have little temptation to look elsewhere.
- Rewards and remuneration- These also must not be random and decided on the whims of the business owner. Proper remuneration packages must be developed, keeping in mind the years of service, the increments annually, the post retirement benefits, health insurance and so on. Following set procedures is preferable to a spontaneous decision about a new recruit’s salary, which may cause jealousy and discontent among other employees.
- External training programs- A small business can get maximum benefit from a work force that is abreast of the latest technological developments in their field. It would be worth investing money in sending them for new training programs conducted at institutes of research and higher learning. Not only will it motivate the employee, but the business will gain substantially as well.
A well developed human resource management system will always work for the betterment of the small business.