As your business begins to get going, you will probably see a period of fast growth that brings in lots of new faces. Those workers will have to get trained, oriented, and properly enrolled for pay and other benefits. You will also have a real gauntlet to run with regard to personnel performance and discipline.
This will be new territory for you! As exciting as this phase is, it also carries the burden of handling tasks that you never had to deal with before. It can be overwhelming.
Many growing firms address their personnel needs with Asure Software, which can handle a lot of the accountability and payroll tasks that face every growing business. But beyond those tasks, there are some other things that will eventually require a dedicated human resources staff.
Where are the areas where you are most likely to need someone working full-time on human resources?
Training personnel
Your training took place on the job as you built the business from the ground up. The way you do things will now have to be written up as procedures and policies, and the new people you hire will need to be trained on those.
The entire process of promulgating regulations and enforceable policies from your personal business ideas, as well as the effort involved in training people about those policies with subsequent enforcement is more than you will be able to do with the other commitments you have. That’s when a human resources departments comes into play.
Tax issues
When your business was small, it was probably considered a self-employment situation at tax time. You may have made quarterly estimated payments to avoid owing a lot of money at filing time, but beyond that, things were simple.
Once you have actual employees, someone needs to be there to handle W-2’s and 1099’s, as well as their relevant state and local counterparts. In addition, your business will have payroll taxes to file and pay, and you’ll need someone with experience and training to take care of that.
Benefits management
Benefits are a big emphasis for people seeking a job today. They aren’t content with competitive wages; they want to ensure a good level of income after their retirement and the ability to take that retirement at an acceptable age.
Insurance is similar. With the Affordable Care Act now in effect, employers will have to offer insurance. The question is what the costs and coverage are.
Choosing and managing these systems requires a lot of experience and knowledge, but most importantly for you, it takes a lot of time. You’ll need an HR department to handle it.
Performance management
Most startups are staffed by the owners only. If they have an issue with each other, they typically talk it out. Once you bring in employees, it’s more complicated than that. Quarrelling partners can part ways with a negotiation process. Firing workers is much more difficult.
It’s a process that must be done correctly. If your reasoning or methods for dismissing an employee aren’t legally permissible, you could face a long and expensive court battle that’s likely to bring the problem worker back.
A good HR department will handle evaluations, corrective action, and other procedures in a way that will keep you from running afoul of the law, saving you money and hassle.
It’s tough to admit when something becomes more than you can handle, and most entrepreneurs hate to think of taking on an expensive new department. But it’s clear that in the long run, a qualified human resources staff will pay for itself.