Should You Be the Boss and Human Resources?

It’s a dilemma faced by many entrepreneurs and even full-fledged functioning businesses—how to manage all the different functions generated by your human resources, while keeping your head count to a minimum. In these cases, many company leaders try to wear two hats, handling all the HR functions while at the same time trying to lead the company to growth. Let’s take a closer look at what an HR department actually does, and then we’ll look at some potential solutions.

HR is Important.

First, it’s important not to minimize the importance of a good HR department. Even if items like payroll are automated or semi-automated, there are still aspects of an HR department that are critical to a unified, productive workplace with engaged employees. Here are just a few of the mission critical items that HR is meant to handle:

• HR hires the help. From talent acquisition to development of employees to performance management, HR is responsible for working with managers and executive staff to ensure that the right people are in place to accomplish the functions of the company. Without an organized hiring process, recruitment planning, and screenings, the functions of your company could soon grind to a halt.
• HR pays everyone. Again, even if your payroll is automated, you still have to figure out how much to pay each employee, necessitating an overall strategic compensation plan.
• HR handles the benefits. Employee benefits are a significant part of an employee’s overall compensation, which means that researching, recommending, and implementing employee benefit programs can quickly turn into a major project.
• HR seeks out the right people for specific jobs. If your company is experiencing significant change, growing faster than expected, or changing strategic goals, it’s likely that HR will need to seek out employees who can handle these new functions or roles.
• HR is head cheerleader. Very often, it’s a company’s HR department that drives the culture, handing functions like workplace activities, events, field trips and team building opportunities. Often, HR is key to developing a positive company culture.
• HR keeps the peace and follows the law. Understanding human resource law and the complex requirements for situations involving a wide variety of laws can be a perilous task. Among the laws that govern the employee-employer relations are the Fair Labor Standards Act, a variety of civil rights laws, the Family and Medical Leave Act, and the Uniform Services Employment and Reemployment Rights Act.

What are my options for managing Human Resources?

Well, you can go in a lot of different directions here. First, if you decide to keep being the boss and managing all the human resources functions, you need to invest in some expertise and make sure everyone in your organization understands how their HR needs are being met. Here are a few things you can do to help yourself:

• Remember that even when you’re managing HR functions, you’re still the boss. One of the main reasons to have a dedicated HR department is to separate the division of power between leadership and HR. A traditional HR manager only has as much power as leadership will invest in that individual or department, but the boss can fire anyone for any reason in most states.
• Offer a way for employees to report problems. Since you don’t have a dedicated HR department, your employees don’t have any way to report problems. Assure employees that any complaints they bring to your concern will be handled fairly. It’s also worth noting that if you, as the boss, won’t address a problem, you wouldn’t address it if you had an HR department either. Use your power for good.
• Educate yourself. Professional HR managers are dedicated professionals with years of training and continuing education. It’s challenging to pick up that kind of expertise overnight. At the very least, pick up a book and scan a few Human Resources websites to get the basics down. Another good place to use as a primer is the Human Resources section at the Small Business Administration.
• Inform employees who is handling HR functions. One of the worst outcomes from not having a dedicated HR manager is that it confuses employees. The tasks of HR still exist—someone has to make job offers, negotiate benefits, and manage vacations and absences. Ensure that your employees know what HR functions you are managing and where they should turn with their questions and requests.

Other Alternatives to Managing Your HR

The other simple solution to your HR woes is to get someone else to do it. You can re-task a current employee to manage HR functions part-time as part of their existing job, or you can hire a dedicated HR professional.

The other alternative is to simply outsource your HR needs. Many growing companies are now turning to professional employer organizations (PEOs) to become the legal employer of their staff in order to manage functions like payroll, benefits, vacation, and other HR functions. If you go down this road, it’s important to consider the cost/benefit analysis around hiring a PEO, deciding how much control you prefer to have over your company’s HR functions, and which services you actually need to get off your plate and which ones you feel you should keep.