Does an SMB Really Need HR?

According to SHRM, “Businesses require some kind of HR function as soon as they hire their first employee.” 

At the start of a small business (SMB), the priorities are typically payroll, benefits administration, and compliance. These are referred to as employee-facing administrative tasks (EFATs). EFATs are the base-level HR necessities that monopolize your time and prevent you from getting to the upper-level tasks on the HR Hierarchy of Needs. 

When you’re a small employer, hiring someone to handle EFATs will likely just come out of your own salary. So, for a while, handling them yourself is the wisest financial choice. Doing these tasks will also show you just how much your HR person will do for your organization and how important it is as a leader to provide support to their role. 

How Do I Know It’s Time to Hire HR? 

The U.S. Chamber of Commerce recommends bringing on a full-time human resource staff member “when there are at least 10 employees within the company.” 

When BerniePortal first became an organization, CEO and Founder Alex Tolbert, alongside his brother, Brian Tolbert, handled all of the administrative tasks or EFATs. They knew HR was important, but they simply didn’t have the funds. 

But as the business grew to about 15 employees, the EFATs became too much to handle. Alex and Brian were supposed to working on growing the business, but they were swamped with tasks like running payroll. 

Alex shares, “First it’ll feel like a lot of work to hire HR. You have to train them and pay them, when you could just work harder and not have to hire that person. But ultimately, hiring HR will take a huge burden off your shoulders.” 

Alex recommends writing down everything you do over the next month that you feel is administrative rather than customer-facing. If it looks like a full-time job, then you’re ready to hire HR. And, better yet, you’ve already written the job description! 

Writing tasks down will also help you ensure you’re not hiring HR too early. If that happens, you could be stuck paying someone a full-time salary for a job that can be accomplished in part-time hours. 

What Should My First HR Hire Be Able To Do?

When you hire your first HR employee, they will likely be responsible for finance, HR, and office management, all under one umbrella. 

Your first HR hire should be able to do all the necessary activities that so often get turned to other people. These activities include payroll, accounts receivable, accounts payable, and personnel issues. These tasks are considered essential to the success and functionality of your organization. 

Keep in mind that you’re hiring them to take things off your plate. Your first hire likely won’t know everything or be well-versed in HR compliance law, so it's crucial you offer strong support and resources that will help them get up to speed. For example, you can direct them to BernieU's free online certification courses or our HR Party of One Youtube series. 

Why Not Have a Team Member Handle HR Responsibilities? 

It’s simple. Your employees are not prepared to do HR tasks alongside their other workplace duties, and it’s not what they were hired to do! It would take time to train them and they generally wouldn’t have a good attitude about it. 

Delegating EFATs to different employees can also weaken the overall productivity of your organization as it grows. Employees will likely have to work longer hours to fulfill responsibilities that shouldn’t have been theirs in the first place, which can lead to burnout and low retention. 

Often at an SMB, one employee will find themselves in a position where they’ve started taking on HR responsibilities. We call this person an “HR Party of One.” If that person has the ability and desire to grow into the next role as the organization grows, consider transitioning them into a full time HR role. 

How Can BerniePortal Help Your SMB? 

If you don’t have an effective system in place for EFATs, you will always feel like you need to hire more HR employees. Your workforce will constantly harass you with questions about their benefits, paystubs, PTO, etc. Getting anything else done will start to feel impossible! 

If most of your employee-facing tasks are run automatically, you won’t need a huge HR team at your SMB. With an all-in-one HR solution like BerniePortal, employees can find answers to their questions without bombarding HR with questions. You can keep the size of your HR team manageable for longer, and your HR leader can start focusing on upper-level HR tasks like managing workplace relationships, recognizing and rewarding employees, and promoting learning and development in the workplace. 

Both the HR leader and your workforce will feel that they are part of a well-run organization. 

Additional Resources

You can stay informed, educated, and up to date with important HR topics using BerniePortal’s comprehensive resources:

• BernieU—free online HR courses, approved for SHRM and HRCI recertification credit
• BerniePortal Blog—a one-stop shop for HR industry news
• HR Glossary—featuring the most common HR terms, acronyms, and compliance
• Resource Library—essential guides covering a comprehensive list of HR topics
• HR Party of One—our popular YouTube series and podcast, covering emerging HR trends and enduring HR topics
  
• Community—the HR Party of One Community forum, a place devoted to HR professions to ask questions, learn more, and help others