Too many businesses see HR as entirely an administrative function about filling out the required paperwork. However, that is not the true purpose of human resources.
The main objective of HR is to help the organization build and retain a highly competent team of innovative employees who work together to enhance and protect the company’s bottom line. Without your employees, you don't have a company. It involves many basic elements, such as payroll and benefits, but it goes far beyond that. At its best, HR helps solidify your organization's culture by addressing worker concerns and making them feel appreciated and heard.
Specifically, good HR:
Fulfills Legal and Financial Responsibility
While the basic paperwork is not the sole purpose of HR, it does remain important. HR needs to make sure you comply with all legal and tax regulations. It can be complex and almost a full-time job on its own, especially if you have employees in multiple states.
HR has to onboard employees, fill out tax forms, and pay everyone on time and in full. Mistakes in these areas can lead to huge problems, and the cost of payroll errors, in particular, can be terrifying. They have to put up OSHA posters and keep them up to date. A lot of this is small, tedious stuff that requires meticulous attention to detail a good understanding of the law, but is essentially the same for all employers.
Unfortunately, getting all of this done can fill HR's plate on its own, leading to the other important areas you may be neglecting. The answer is to outsource to a professional employer organization (PEO). The PEO can take over most of these legal and compliance issues, including filing payroll taxes for you (a payroll provider can only tell you how much you owe). They will have a full-time compliance officer, something most small companies can't afford. That frees up HR to handle the other two functions.
Increases Employee Engagement
Engagement is an intangible thing that is hard to measure, but it is vital for productivity and retention. HR helps keep your employees engaged by handling ongoing reviews, which should not be annual interviews but should be a process of continuous feedback and organizing team-building events.
Employees are also more engaged if they have career opportunities with your company. HR helps with this by helping provide training and working with employees. Rather than dictating training from above, good HR works with employees to help them find the training they want and feel will support them in their roles or in a position they feel they can move upward through to take on more responsibility. HR should also be ready to consider internal candidates preferentially for promotion. It encourages them to stick around, ensuring you retain valuable institutional memory. It makes it easier to find new hires as you will be looking to fill lower-level positions requiring less specific experience.
Performance management is also vital to ensure that you train effectively and employees work efficiently. Finally, HR can and should be providing employees with the support they need to thrive. A PEO can help with this by allowing you to provide better benefits at a reasonable price and freeing up HR to find out what your employees want. Too many companies offer standard perks they think everyone wants, but sometimes employee satisfaction can be improved by something as simple as more decaf tea in the break room.
Upholds Your Corporate Image
Finally, HR supports your employer brand, which is vital to attracting and retaining talent and is part of your overall image. Having a good employer brand can even help sales, as more and more customers care about how the businesses they buy from treat their staff.
Your employer brand brings your values into the company culture. For example, if one of your values is the importance of family, HR can help by encouraging staff to spend time with their families. They can help by making sure employees can use their sick time to care for a child or spouse. Also, including family in company events can help expand these values and encourage bonds between employees that can help with retention. Letting everyone bring their spouse and children to the company picnic makes for a more fun event that improves morale.
Your company culture and employer brand should be firmly determined and ideally remain stable over time. That helps you demonstrate to employees that you are loyal to them, without which you can't expect their loyalty. Bad bosses expect loyalty from expendable employees. Don't be a bad boss. If you are not loyal to your staff, they will leave as soon as they find a better opportunity.
It can be harder to do this as your company grows. The more new people you bring in, the harder it is to ensure that each new hire is a good fit who understands your culture. A PEO can help with this by lending you their expertise dealing with all kinds of "growing pains" and how they might affect your company culture.
Partner with a PEO to Improve Your HR
The most significant benefit of a PEO is that it helps offset the HR burden. It handles tasks like compliance and payroll, freeing your in-house staff to focus on employees. Payroll does not need to be done by somebody familiar with your company. Planning company events does. A PEO does not replace your HR staff but rather complements them.
Ensure that your HR team is doing what they need to do to build a stronger company, retain talent, and support sustainable growth.