As a small business owner, you probably have thought of ways to cut business expenses. Resources are tight in small businesses, and you probably hire, terminate, and discipline your employees without the need for human resources (HR). So, eliminating the HR department is often the first thing that comes into mind when you are cutting expenses, right? Well, there is a lot more to human resources for small business than just hiring and firing.
What do statistics tell us?
Statistics show that 54 percent of small business owners handle employment issues by themselves. Surprisingly, 50 percent of these business owners are confident about how they deal with HR issues. Unfortunately, most business owners often delegate HR duties to employees with little or no experience in workforce-related issues. Out of those who spent their time on an HR issue, 81 percent of them are not confident in their HR skills, and in most cases, they are ought to make mistakes that can quite costly for a small business.
So do you need Human Resources for a Small Business? Yes, an HR department is a critical component for employee well-being regardless of the size of your business. Here are some advantages the Human resources brings to your small business. Later on, we can look at your alternatives if you don’t have the budget to handle the nitty-gritty details of human resources.
HR manages employee requirements
As an employer, you need three files for your employees
- Personal files (hiring documents, performance review as well as separation records)
- Payroll files (salaries and wage documents, payroll deductions)
- Medical files (absence excuse notes, workers’ compensation benefits, and insurance information.
A HR will be maintaining these records and ensure that they are up-to-date.
There are many laws that you need to comply with as a small business owner, and an HR personnel ensures compliance with these legal requirements. Some of these include;
- Anti-discrimination laws ( for example, Title VII, Age discrimination in employment act (ADEA), an American with disability Act, Generic information nondiscrimination Act (GINA) e.t.c)
- Wage and salary laws (specifically the FLSA laws and other San Diego laws pertaining to minimum wage).
- Leave laws (FMLA and other state laws)
- Immigration laws (Immigration and Nationality Act (INA), Illegal immigration reform and immigration responsibility Acts( IIRIRA), immigration reform and Control Act(IRCA), GINA among others.
- Benefits laws: Mostly benefits laws are complex, but you must be aware of what you must provide based on the size of your business.
- Union laws: even if your small business is not unionized, you still need to comply with some state laws and the National Labor Relations Act (NLRA).
To simply put it, human resources will not only ensure you comply with these laws and other legal requirements, but they will watch for changes in these laws. Here is a compliance continuum for coverage requirements.
Increases productivity in your small business
An HR professional ensures that everyone in your small business is on the same page as you. Your employees will be able to use your business values and goals to set their goals and set your business forward. HR often develops training processes and developmental opportunities to help employees learn new skills that help them become more efficient. They will be able to identify which role demands skills and develop an appropriate training program, which ultimately means staying ahead of your competition.
However, everything considered, it can be quite tempting to put Human resources on the backburner especially if your small business does not have many resources. Nevertheless, if you can, Human resources should not be the first thing to consider when you are trying to cut costs. In fact, they can control costs not to mention keeping your small business out of hot water legally.
Human Resource on a Small Business Budget
While human resource for small business is critical, it can be a drain to your resources. So, it is important to consider outsourcing the HR processes to an external firm. This way, you save the extra expenses for an in-house HR and you free yourself from those ad-hock HR subordinates without experience or confidence to deal with HR-related issues.
A professional employer organization (PEO) can help tackle your business needs and make it easier for you to stay compliant and updated on the ever-changing world of HR.
What is PEO?
Professional Employer Organization (PEO) assists business owners to manage human resources, compensation benefits, payrolls, tax administration and ensure regulatory compliance. This means that once you have to enter into a co-employment agreement. In this arrangement, your business maintains complete control of the day-to-day management of the employees, while the PEO offers HR guidance and administration.
So, as a small business owner, you will have the right to hire, fire, discipline, determine the payroll wages, managing finances, and bookkeeping, or negotiate contracts as you see fit for your business. The PEO processes the employee payrolls, maintains the compensation coverage, pays taxes, provides benefits and training programs, provides workplace safety guidance, and other human resource guidance.
So what does this mean for your business? Well, help with compliance, risk protection from HR-related issues not to mention big savings.
What is certified PEO
Certified PEO’s are basically certified by the IRS (Internal Revenue Services under the Small Business Efficiency Act (SBEA). They are recognized as an employer for tax compliance issues.
PEO services San Diego
When you have a PEO that provides expert HR service, your business can have someone to lean on when tough human resource issues arise. A certified PEO San Diego can help mitigate some of the day-to-day risks, that companies face. ADP TotalSource is one such certified PEO.
Working with a PEO San Diego CA will give you;
1. Personalized human resource guidance
PEOs are co-employer, which means that even though they do not know your business as much as you do, they share your responsibilities. When you sign into a co-agreement with the PEO, its employee becomes their employees, which means they can get you professional and personalized guidance to your small business. The guidance you get from a certified PEO is backed up with data, expertise as well as proven HR processes.
2. Full-service HR specifically designed for today’s workforce
One of the greatest advantages of collaborating with a PEO is that you get full HR services that are designed for today’s workforce. PEO can handle all duties you would expect from an HR department. They can create custom data visualization based on your business insights to ensure that you make proper strategic decisions that propel the human side of your small business.
3. The right talent for your business
Nowadays, recruitment usually moves at light speed: Employers are looking for qualifies people as fast as possible. The problem is the time and energy needed to focus on solid recruitment. PEO services in San Diego can help choose the right candidate for every position, eliminating the hassle and bustle of recruiting the right candidate. A certified PEO can put the power of data to work for your business, guide you on the best recruitment strategies, so you can hire with confidence. So you won’t just hire by guessing, but by knowing.
4. Straightforward Worker’s compensation
Claim management and insurance can make worker compensation costs for small businesses and time-consuming. A PEO can provide worker compensation coverage through its program, thus helping with compliance, paper, and certification, so you get to concentrate on the things that will improve your business.
5. PEO amplifies people side of your small business
HR may seem straightforward; however, it takes powerful human expertise and technology to keep your business processes running smoothly. With a PEO service, you can amplify your employee productivity and reduce turnover. PEO takes care of the payroll, payroll taxes, scheduling and time tracking, training and development, or talent management, and benchmarking. This leads to better customer service continuity to your clients. When it comes to the people’s side of your business, you need real-time data, and with certified PEO on your side, you can be sure that your business will remain competitive in all measures.
6. Keep lawsuit at Bay
Accidents happen, so no matter how well managed your company is, the worst can happen and claims of wrongful employment practices are ought to come your way. More than 2.9 million non-fatal workplace injuries were reported in 2015, by private injuries, so it is good to be prepared for the worst. A single employment lawsuit can devastate your small business, so keeping your liabilities at check is important. A San Diego PEO can help mitigate the risk of such claims by providing viable risk management strategies.
7. Team up with an outstanding PEO in San Diego
The PEO world is complex, but it is important to team up with the best San Diego PEO, or the one that offers the most comprehensive services for your business. Here are some of the services you get from ADP certified PEO solution.
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