The Best Practices in HR for Small Businesses

The success of an organization depends upon its employees, which is why having an efficient HR team is major for any business, no matter how big or small your company is. 

You are probably wondering: How do I even begin? Well, we have you covered with this blog with the best practices in HR for small businesses

Human Resources does way more than the recruiting process. A good HR department finds the right people to work for you, keeps them engaged, and creates and implements the policies, benefits, and infrastructure that will set your people and your company up for success.     

In a small company, you should focus on developing the full potential of your limited human assets to achieve the best possible results. Whether you are just getting started or already have 50 employees or more, follow these HR tips for small businesses to fine-tune your strategy and watch your employees improve their performance significantly!  

Graphic hand-picking a candidate from a diverse group of people, one of the best practices in HR for small businesses.
The best practices in HR for small businesses involve way more than picking the right people

Maintain HR compliance

HR compliance is creating and enforcing internal policies that follow relevant labor and employment laws and regulations. The U.S. Department of Labor administers and enforces more than 180 federal laws that are constantly changed and updated, plus they are different from state to state. So, we recommend an experienced HR professional to be in charge of this part, either internally or externally.

Keep employee documentation in check

An HR team is in charge of maintaining all the paperwork necessary that ensures your business is compliant with employment laws and protected in the event of a dispute. All small businesses should have the following documentation:

  • I-9 File: This contains an I-9 form of each employee that identifies and verifies that they are eligible to work in the United States. You must keep them all together, in one file.
  • Employee Medical File: Contains all medical information of an employee, including disability information.  
  • Employee General File: This file should contain resumes, performance reviews, W-4 forms, payroll details, background checks, and all additional information associated with an employee.

Pay attention to company culture and employee engagement

Every organization develops a company culture, whether they realize it or not. It’s better to have a say in the matter and make sure your culture aligns with your company values and goals. 

Group of people happily talking and working together because of one of the best HR tips for small businesses, good company culture.
One of the best HR tips for small businesses: Improve productivity with strong company culture.

Here are some ideas to keep your culture in check:

  1. Hire people that share your company’s vision and values and at the same time offer a different perspective. 
  2. Give rewards and recognition. Make employees feel valued with Swagpack. They can pick their own customized gifts and goodies! Don’t forget to read our blog with 10 Awesome Last-Minute Gifts for Employees if you need any more gift ideas. 
  3. Pick the right perks & benefits. They should be carefully chosen to help create a great work environment that reinforces positive aspects of your culture. 
  4. Focus on fostering feedback. Foster transparency and trust and encourage open communication between all levels of your organization.
  5. Make your employees feel appreciated and supported. Showing your employees that you care about their well-being always goes a long way. A good idea is, for example, creating an inclusive workspace for working parents. They will significantly value these details.

Having a strong company culture can help improve productivity, innovation, employee engagement, retention, among other benefits in the long term. 

Elaborate an employee handbook

Even if you don’t have many employees, you still need a manual or handbook to lay out the rules, regulations, and expectations you have for your employees. An employee handbook will give them all the necessary information and knowledge to know exactly what’s expected of them. It should be accessible to all employees at any time. 

A good employee handbook will also establish protocols and guidelines for dealing with any issues that may arise in the workplace. So, it is important to cover everything from vacation requests to harassment policies.

Once you have one it is essential to review it annually to keep it up to date with any changes in your company or the current employment laws.

Practice inclusive hiring practices

People of different backgrounds and experiences working together to achieve a common goal bring the most innovative ideas to the table.

A group of diverse candidates sitting waiting to be interviewed for a job, an important HR best practice.
HR best practice: Inclusive hiring practices for diversity

Companies that prioritize diversity become resilient, adaptable, and effective companies that outperform those that don’t invest in it. For example, a study made by McKinsey & Company found that businesses in the top quartile for gender diversity outperformed those in the fourth by 36% in terms of how profitable they were in 2019. 

Here are a few ideas to make your recruiting process more inclusive:

  • Adjust job descriptions to make sure they are inclusive
  • Expand your search to include diverse groups and pools of talent
  • Assess CVs without having any personal information to remove any bias
  • Design the interview and application process to be inclusive 

At Swagpack, we know how beneficial it is to be inclusive, so we have even more tips to help you create an inclusive workplace that can help even if you are a small business owner.

The bottom line is that maintaining employees’ well-being is crucial for any business, no matter how big or small you are.  

Add these tips to your HR management strategy to unleash the full potential of your employees!

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