7 HR Basics for Small Business

This article could easily be titled “Employees, Paperwork, Leadership…oh my!”. I’m sure it would be safe to say that when you decided to start your own business and venture into the world of an entrepreneur – there are many things you anticipated. You anticipated the long hours, tight budgets, having to do your own marketing, and making sales calls. You also dreamed of how it would be to have flexibility, be the master of your schedule and reaping the rewards of your hard work. You have seen your company grow and now you find yourself hiring others to assist in the work load. Here is the good news/bad news. The good news is that you have developed from a one person operation to several people or more. The bad news, these extra people have laws, expectations and dreams of their own that you need to manage.

To assist you on this path and to make the transition from entrepreneur to boss, here are 7 human resource basics to keep you on the road to success.

Legalities. Having employees means having to follow both state and federal laws, the laws you have to follow vary by the number of employees you have and the state you live in. You can visit the Department of Labor to learn which federal laws apply to you and through this site you can visit your state’s site. Regardless of size or state – you will have to do the following:

  • All employees must complete tax forms (general rule of thumb – if you are taking money out of someone’s paycheck you will need their signature on a piece of paper)
  • All employees must complete an I9 form (this is the one where an employee declares they are legally able to work in the USA)
  • I9’s must be kept separate from the employee file.

Benefits. Most people don’t realize this but a company does NOT have to provide benefits (yes, this will change for some in 2014 with healthcare reform). You must pay people at least minimum wage but benefits are currently not a requirement. However and this is big HOWEVER – if you do provide benefits there are rules on how they are provided and what has to be done when someone leaves. For example: if you provide healthcare insurance you will have to abide by COBRA when someone leaves. States also vary on this so check out your states Department of Labor site for details.

Recruitment. This is how you are going to find people to work for you. You must have a clear plan on the requirements you need, how you will determine if candidates possess the requirements, how you will interview and what you will offer. For many business owners this can be a difficult task as there is a tendency to hire strictly based on personality or skill instead of a balance between the two. Spend extra time on the process and don’t rush to hire the first person who walks in the door.

Listen. Having people work for you is a great sense of accomplishment and can be time consuming as well. If you did your recruitment correctly the next step is to listen. Listen to their concerns, ideas, thoughts, etc. You don’t have to agree with them but listening and giving your attention will go a long way in building a strong working relationship.

Open Communication. Let those who are around you know what you are up to. Share your plans, ideas, concerns, etc. as much as you are comfortable. Tell them about the new client you are going to see, discuss the new product/service you want to implement, and ask for their feedback. This will allow you to start building your credibility as a leader.

Coach. Your employees aren’t going to think the same way you do or view your business the same way. You need to coach each one on how they fit into the organization, on their position (training) and how to improve. Push the limits, set high expectations, and help them get there.

Departures. Some people will decide to leave or you will ask them to leave. Treat each person with dignity as they depart and they will become a positive spokesperson for your business. You never know who they are talking to – future employees, future clients or possibly future investors.

Don’t let your dreams get clouded because you aren’t following the basics. Having employees will help you grow your business your business beyond your expectations – enjoy it!

This is the first in a series of articles addressing the HR basics for small business.