Why Do You Need HR For Startups and Small Businesses?
Employing your first person or people is a very exciting time. But it is also a big investment, so it is critical that you get it right. There are rights and responsibilities you must be aware of and adhere to. Plus you don’t want your investment in talent to be wasted by poor performance or high turnover so it is vital that you set yourself up for success by setting up HR for your business.
There are a number of steps to take to set your business up for success which I have outlined here. You can follow these steps yourself, or you can outsource HR to a freelancer, very much like you might outsource some of your finance to an accountancy firm.
Setting Up HR: 8 Steps
1. Define Your Culture, Mission, and Values
Who are you? | Why do you exist? | What do you stand for?
The environment you build for your team is going to have a huge impact on the work they deliver.
The foundation of any successful company lies in its culture, mission, and values. These elements define who you are as an organisation, what you stand for, and the direction you’re headed. They are the guiding principles that influence your business strategies, employee behaviours, and customer relations. By clearly defining these core aspects, you attract engaged and motivated individuals who are not just looking for a job but seeking to be part of something bigger. They become your brand ambassadors, both inside and outside the company.
2. Structure Your Organisation
Operating Model | Org Charts | Job Descriptions | Job Evaluation
A well-defined organisational structure is essential for clarity and efficiency. It delineates the reporting relationships and workflow within your company, which helps to avoid confusion and streamline processes. This structure supports good governance and provides a clear pathway for communication and decision-making. It also helps employees understand their roles and responsibilities, which is crucial for accountability and performance.
3. Compliance
Create a Safe & Fair Working Environment | Protect Your Business | Maintain Your Reputation
Decide what type of employee you need
Do you need full-time or part time? Are they an employee or a worker? These are legal statuses which uterine their rights
Check you can afford to take on employees
Consider National Minimum Wage, NationaI Insurance, sick pay, pensions, statutory leave such as maternity
Make your workplace safe & accessible
Ensure you are preventing discrimination, keep data secure, comply with H&S legislation, conduct required checks on employees
Register as an employer and set up PAYE & Pensions
Register with HMRC as an employer, decide how you will run a payroll and understand your pension responsibilities
Get Employers' Liability insurance
EL insurance will help you pay compensation if an employee is injured or becomes ill because of the work they do for you. It must cover a minimum of £5m.
Attract & Recruit Employees
Decide whether you do this yourself or use an agency. Ensure your practices and processes are not discriminatory and are accessible for all.
Carry Our Required Checks
Check their right to work in the UK, conduct DBS checks if applicable, check if they are eligible for a workplace pension
Policies & Contracts
Ensure a contract or written statement of employment particulars is issued to every employee on or before their first day. As a minimum, you will need H&S, Disciplinary and Grievance policies.
Tell HMRC about your new employee
Tell HMRC about your new employee on or before their first pay day and work out their tax code. Ensure you know what is required when you run a payroll
4. Attract & Retain Talent
Culture | Leadership | Physical Environment | Flexibility | Compensation & Benefits
An attractive workplace goes beyond physical aesthetics—it encompasses the overall environment, including the company culture, employee compensation and benefits, and opportunities for growth. A workplace that values and invests in its employees benefits from loyalty and motivation, leading to higher productivity and retention rates. By providing a supportive and engaging environment, you empower your employees to perform their best, which in turn drives your business success.
5. Create an Employee Handbook
Clarify Expectations | Communicate Policies & Procedures | Provide Useful Information |Reinforce Culture
An employee handbook is a vital communication tool that outlines your company’s policies, procedures, and expectations. It serves as a go-to resource for employees, helping to ensure consistency and fairness in the application of your policies. A comprehensive handbook can also serve as a protective legal document, demonstrating that employees have been informed of company policies and their obligations.
6. Implement an Engaging Onboarding Process
Increase Engagement | Reduce Time To Competence | Lower Retention Risks | Reinforce Culture
A seamless onboarding process is your new hire’s first real impression of your company. It’s an opportunity to reinforce their decision to join your team and set them up for success. An effective onboarding process accelerates the time it takes for new hires to become productive members of the team and reduces the likelihood of early turnover. It’s an investment in your employees’ future and, by extension, the future of your company.
7. Performance Management
Set Clear Objectives | Align Objectives with Company Goals | Framework for Recognising High Performers | Framework for addressing Underperformance
Performance management is not just about annual reviews; it’s an ongoing process that involves setting clear goals, providing regular feedback, and supporting employee development. A formalised performance management system helps align individual performance with company objectives, driving business success. It also provides a framework for recognising high performers and addressing underperformance, which is essential for maintaining a high-performing workforce.
8. Select the Right Software
Automation | Save Time | Reduce Errors | Manage Data & Reporting
The right HR software can revolutionise the way you manage your human resources. It can automate routine tasks, reduce paperwork, and provide insightful data that can inform your HR strategies. Investing in technology can lead to more efficient operations, allowing your HR team to focus on strategic initiatives rather than administrative tasks. It’s an investment that pays dividends in time saved and errors reduced.
Considerations:
- System Functionality And Features
- User Experience And Interface
- Integration Capabilities
- Data Security And Compliance
- Support And Training
- Pricing And Licensing
- Vendor Reputation And Reliability
- Implementation Process And Timeline
Do You Need Help Setting Up HR for Your Business?
With over 25 years experience in HR across a variety of industry sectors, I am very well-placed to help you with setting up HR for your small business. I can help with some of it, or project manage and maintain all of it.
Please get in touch to book a free 30 minute no-obligation consultation to discuss your needs.
