Do You Need a Human Resources Department?


Human resources. This is the department of a business that seems more extracurricular than essential, but when certain issues arise with people on your team, HR can absolutely save you.

When you’re a new business or still very small, with a limited budget, you probably consider HR to be somewhat of an extravagance. It’s more important than you might think, which we’ll show in this post, because the humans working for your business are your greatest resource.


No Business is Too Small for a Human Resources Department


The first thing to recognize is that small businesses can run into the same issues with employees as large businesses, even though they may look different in a smaller organization.

Even in a business with as few as 2 or 3 employees, problems come up from time to time which could really use a third party to step in and assist with resolving it, rather than the owner stepping in to handle it when they barely have time to properly address it.

Your business may do just fine without implementing HR but just handling it yourself if anything comes up, especially if you happen to have some great people skills, but you will miss out on something that could save you a ton of time and headache.

You’ll be missing one of the core functions of HR, which is to prevent small, seemingly harmless issues from turning into big ones. First of all, it’s just not good when employees don’t have anyone to advocate for them to make sure that everything is managed fairly.

If a business is unable to add and HR department, then employees just have to hope that their owners are good managers, relate well with people, and treat everyone equally.

By no fault of their own, many owners don’t have these qualities because they’re usually bottom-liners who are only concerned with keeping the business running. New businesses in particular can greatly benefit from someone to act as a go-between.


It Doesn’t Have to Look Like Conventional HR


You don’t necessarily need someone in a cubicle with a sign labeled, “Human Resources”. The idea is simply to have at least one person who can act as a third party with no bias, and who is trained to perform the duties of an HR office.

If you can find a professional who can handle those responsibilities, then you can focus on running and growing your business instead of trying to mitigate complex personnel issues.

An HR professional can work with owners, as well as employees, to find a path to resolving issues and move beyond them while minimizing errors or escalation. The point is that you don’t need to have a big, official department for it.


HR Does More than Conflict Resolution


HR is not just there to receive complaints when employees have grievances; they can also handle quite a few other things.

First and foremost, HR can play a significant role in hiring and firing employees, including the task of easing and facilitating the transition of an employee if they are fired.

That, alone, can prove to be a crucial skill because one less disgruntled individual walking around out there means there is one less potential problem you’ll have to deal with, even after someone has been let go.

On a more positive note, an HR professional can also help to plan the trajectory of each member of your team, figure out how they can be best utilized within your company, and recognize their strengths and weaknesses to help them improve. Honestly, you can consult with HR for any decision regarding employees.


What If You Cannot Afford an HR Person?


If you’re like many small businesses, you may not have the funds available to spend on adding a human resources department. You may be able to get by without it and handle everything yourself, while making sure that your employees are taken care of, in which case you might not need HR at this time.

At any rate, if you can find space in your company budget to hire one HR person, it is definitely worth the expense and worth rearranging your budget. Consider the importance of it.

For one thing, you shouldn’t take lightly the legal risks, i.e., infringement on your employees’ personal rights. It’s always possible that, even though you never intended to do so, something could get overlooked that results in a legal issue with someone.

You can take it upon yourself or your business partner, if you’re fortunate enough to have one, to keep the best interests of your team in mind, but it’s extremely useful to have an HR professional in-house who can do that for you.


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Stephanie is the Marketing Director at Talkroute and has been featured in Forbes, Inc, and Entrepreneur as a leading authority on business and telecommunications.

Stephanie is also the chief editor and contributing author for the Talkroute blog helping more than 100k entrepreneurs to start, run, and grow their businesses.

StephanieDo You Need a Human Resources Department?