And once you’ve developed market-ready products and and rented premises, it’s time to hire staff.
With tight profit margins, hiring salespeople and client relationship managers is sometimes prioritised over HR.
And basic HR functions like processing payroll and expenses are split between a handful of existing employees in a DIY fashion.
But disregarding qualified Human Resources professionals could be detrimental — whether you’re selling specialist wire or making fortified wine.
So here are three reasons an HR department is important for a small business.
- Growth
When small businesses enter the market, they can maintain momentum through a tight group of highly motivated founders.
And these qualities can be successfully role-modelled for the first external staff who are hired, ensuring everyone is working towards a common goal.
But as a business expands, maintaining the same internal and external service standards can be tricky — staff and customers might suffer as quality slips and a hard-won reputation is damaged.
So hiring an HR partner prior to significant expansion is wise — they can maintain training standards and ensure new managers are up to the job.
- Staff support
In the UK, SMEs have a poor record for investing in employee wellbeing — yet British businesses lose 131 million days to sickness absence each year and one-third of SME employees will experience a mental health problem during their careers.
One of the reasons small businesses don’t invest in wellbeing initiatives is the perceived expense, but the longer-term costs of ignoring the issue are higher — staff sickness, poor retention and recruitment of replacements cost firms dearly.
Happier and healthier employees want to stay with companies, perform to higher standards and increase output and profits.
And an HR employee can be perfectly placed as a people’s champion who implements wellbeing and benefits programmes, aided by apps that monitor health and collect valuable employee data.
With more onerous admin tasks becoming automated, HR staff can focus on playing a more supportive role.
- Culture
Good company culture is a bit like air — you only recognise its importance in its absence.
But this elemental dynamic has a powerful effect on profitability, because focusing on culture could save the UK economy £23.6 billion per year.
A recent BreatheHR report stated that 34 per cent of British employees resign due to poor workplace culture, but 60 per cent of SME leaders merely considered it ‘nice to have’.
However, HR staffers can become guardians of positive and progressive cultures where leaders demonstrate the right values in every action.
And crucially, they can monitor employees at all levels and intervene independently should a manager or anyone else refuse to behave in a manner that benefits the business.
If you have ambitions to grow your startup and maintain early success, these three benefits of an HR department provide food for thought.
What role does your HR department adopt? Share your thoughts in the comments section.
