Small business owners without a designated HR manager often feel overwhelmed by all of the HR responsibilities that come with having even just one or two employees. HR has evolved far beyond payroll and ensuring your employees are paid accurately and on time – although, payroll does remain a critical component of the employer-employee relationship. In fact, according to a recent Paychex Small Business Survey, 21 percent of today’s owners lack confidence in their organization’s ability to keep current with HR compliance.
From background checks to onboarding to employee handbooks, every step of the employee journey requires a deeper understanding of HR and employment laws than many small business owners are not prepared for. After all, they got into business because they had an idea – not because they are HR experts.
Upon starting their business or hiring their first employee, small business owners can struggle with where to start when it comes to HR. But, in a few steps, you can help your small business clients assess their HR needs and better understand how to get their HR functions up and running efficiently:
- Assess your client’s understanding of and compliance with employment laws. Is your client aware of the federal employment laws that impact his or her business? How about the state and local laws (especially if they conduct business in multiple locations)? According to those business owners who responded to the Paychex survey, the top three employer regulations they’re either not complying with or not aware of are: youth employment standards (42%), employee classification laws (37%), and overtime laws (36%). Getting a gauge on where your clients fall on the compliance spectrum can help guide your HR recommendations with regards to solutions and providers who offer trainings and can lift some of that compliance burden.
- Take stock of their current HR assets. Knowing what HR tools and processes your client already has in place will help give you both an idea of what they need moving forward. Start from the beginning of the employee journey and work from there. What are the tools your client currently uses for recruiting, onboarding, employee file and record retention, training and development, benefits administration, performance management, and employee relations? What about these tools and processes is working for them? What could be more efficient and how?
- Assess their HR execution. There may be HR policies and procedures in place, but how is your client communicating those to his or her employees? For example, is the employee handbook up-to-date and easily accessible to everyone? Automation is one way to increase confidence when it comes to key HR functions. Paychex’s study revealed only 30% of small businesses leverage technology to automate the onboarding process. Additionally, 38% percent of those surveyed report tracking time and attendance manually rather than via an automated system. Embracing automation to accomplish such critical tasks not only saves time, but can also reduce the risk of human error.
HR is evolving and it’s a critical component to any business that wants to succeed. The HR process decisions your clients make can impact their ability to grow and your ability to help them remain compliant and plan for the future. Starting conversations about HR and employment law early can help your client tackle the challenges that inevitably arise and discover solution providers who offer the HR tools and resources they need. Not only will this help cement you as a trusted adviser to your clients, it will also you ensure you’re getting the accurate HR information you need to remain compliant as you carry out financial activities on their behalf.
Mike Trabold is director of compliance risk for Paychex, Inc. Paychex is a leading provider of human capital management solutions for small- to medium-sized businesses.