When business owners get a taste of success, they often want more — thus leading them to expand or scale operations. While growth is certainly better than the alternative, moving too quickly does present additional risks. One of the biggest hurdles that comes with scaling a successful business is developing a consistent and reliable human resources process.
HR management affects several areas of your organization. From hiring and training new employees to keeping your current staff happy, your HR department plays a critical role in the success of your company.
To help you scale your human resources processes as you grow your company, consider the four tips below.
Recognize When You Need a Change
Many startups and small businesses can survive for a while without investing in their human resources department — however, as these businesses begin to grow, the lack of HR structure and policies can create cracks in the foundation of the organization. For these growing organizations, it’s important that you recognize these signs as indications that it’s time to reevaluate your HR processes.
Some of the signs that it’s time to make a change to your HR department include:
- You don’t have any HR personnel: If you’re a business owner still managing your company’s HR, it’s time to make a change. As your company grows, your employees will feel the absence of a dedicated HR person. Whether they need to mediate internal conflicts or request PTO, it’s not realistic for you to run the company and handle these HR responsibilities.
- Inability to find quality candidates: Roughly 73 percent of companies struggle to find quality candidates for their open positions — so, if your business is having a tough time with recruitment, it might be time to reevaluate your HR department.
- Lack of proper training and onboarding: Fast-growing businesses rarely have proper training and onboarding programs designed before they begin scaling staff. In fact, 39 percent of companies don’t offer company culture training during the onboarding process. This lack of proper onboarding can make it difficult to assimilate new hires into your organization.
- You’re experiencing high turnover: If your company is struggling to retain talent, it can often be a sign of HR inefficiencies. While you can’t prevent employees from seeking external opportunities, you can make internal changes to create a company culture that prioritizes its employees — thus, mitigating turnover.
Use Human Resource Management Tools
Finding tools and technologies to help streamline processes is an important way to scale any organizational department — and human resources (HR) is no different. HR management tools can help automate and organize many of the tedious tasks that fall on the HR department.
For example, human resource management (HRM) software like Zenefits, Namely and ClearCompany offer businesses a scalable solution to recruitment, administrative reporting, payroll, employee training and annual reviews, among other services.
Finding ways to simplify your HR tasks through software and other tools is an excellent way to help your organization grow without sacrificing its human resources department.
Hire Temporary Employees or Contractors
If your company is growing quickly, you may be outpacing your staff. When this happens, many businesses resort to hiring bodies instead of taking their time to find the right employees. However, hiring full-time in-house employees is not your only option for scaling staff quickly.
Instead, consider hiring temporary employees (temps) or short-term contractors. Temporary employees can be an asset for growing businesses, especially seasonal ones, because they provide a low-risk and flexible staffing solution. Moreover, fast-growing businesses can use contractors to sustain growth while they take their time finding a long-term solution.
Freelancing, or contracting, is on the rise in the U.S. with reports estimating that 43 percent of the workforce will be freelancers by 2020. This report indicates that freelancing isn’t just a way for businesses to find supplemental employees for the short-term, but it’s a viable staffing solution with extremely qualified candidates.
Outsource HR Responsibilities
The fastest and easiest solution to scaling HR along with your company is to simply partner with a company who specializes in human resources. By outsourcing the HR responsibilities, you can continue to focus on your organization’s core competencies, while leveraging the experience and value of the third-party vendor.
These external partners are also known as professional employer organizations (PEO), and they take care of a lot of HR tasks like health insurance management, recruiting and hiring, employee onboarding, payroll and employee discount programs.
There are several reasons to consider outsourcing human resources management. For instance, when you outsource to a specialized organization, you can rest assured that you are acting in compliance with current employment and labor laws — which can change frequently. Moreover, outsourcing HR functions can actually mitigate expenses and save your company money by providing a more efficient HR solution without employee-related expenses.
Additionally, unlike small businesses, PEO firms can pool employees from several companies to negotiate benefit offerings and competitive medical rates that are typically only available at large corporations. This allows your business to offer more competitive benefits to your employees, thus increasing their satisfaction.
Scaling your business is a good thing, but it does come with some growing pains — including strains that it puts on your human resources department. Between recruiting and hiring new employees to training and maintaining company morale, HR plays a critical role in the growth of your organization. Don’t neglect HR as you scale; use the four tips above to help grow your HR processes along with your business.
Christine Soeun Choi is a digital marketing associate at Fit Small Business. Currently based in NYC, she has a background in business studies and math with a passion for business development. Outside of work, Christine enjoys traveling and exploring art.