Operating a Small Business Without a Dedicated HR Department

IMG_0789Hiring new staff is expensive, particularly when your small business is just taking off. It may seem unnecessary to hire a human resources specialist when you only have a handful of employees and limited funds. Depending on your specific situation and skill set, you may be okay without.But there will be situations where hiring a professional HR specialist is the best and only solution.

HR prevents you from getting tied up in administrative work which can stretch you thin while you are growing your business. If you absolutely must operate without a dedicated HR department, consider the following.

Know the law

HR Specialists must be compliant with legal requirements and legislation. Without their expertise, business owners are vulnerable to compliance and employee issues. The laws can be difficult to understand and keep up with, as they frequently change. To stay well informed and up to date, hiring an HR consultant or corporate attorney is essential.This will help you to avoid a catastrophe.

Use outside experts

Employee relations issues will come up daily especially as your staff increases. You need to have the ability to respond to workforce issues correctly the first time. Usually, in order to do so, you will need to hire someone trained in handling such situations. As a business owner, you may have a handle on entrepreneurial affairs, but you may not know how to correctly and effectively handle day to day employee issues and complaints such as workplace injuries or harassment.

Delegate HR responsibilities

If you are one of the few or only one working for your company, of course you won’t have anyone to delegate to, but you also have fewer responsibilities to delegate. Remember that as your business grows, your responsibilities (payroll, compensation, benefits, regulations, etc.) do as well. This increases your need for assistance. Eventually you will need to rely on others to effectively manage all administrative tasks.


Third party agencies specializing in HR can immediately fill your need for sufficiently trained employees. Understand though that these individuals will not be familiar with the intricacies of your business. This can possibly result in a lack of understanding of your mission, a lack of dedication, and poor decision making. You will save money, but this may not be the most pragmatic solution.

Develop consistent and quick systems

Informality may work fine when you have only a handful of employees, but as your business grows your need for established procedures does as well. Inconsistency and lack of clarity can deplete morale and productivity. The more employees you hire, the more confusing it can become if rules and procedures aren’t set and maintained from the beginning.

Recognize when it is time to hire a professional

Having a trained human resources specialist on your team is beneficial in numerous ways. Sometimes that added cost is the best thing you can do for your company. It allows you to invest your time into expanding your business and not have to deal with the constant distraction of personnel matters. Small business owners are often quite reluctant at first, but taking the plunge turned out to be one of the best decisions they made for their company (and sanity).

Consider hiring an individual who has the skill set to fulfill administrate duties as well as the ability to assume a leadership and development role. The hire will be one of the best decisions you can make for your growing small business.

Greg Bentley is a human resources specialist who has worked for several large scale companies. When he’s not busy at work fixing the HR Software for a number of helpless staff members, Greg enjoys studying languages and fighting the good fight to keep bad disco dancing alive and well.

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  1. This seems to be an area that small businesses wait on the longest. The truth of the matter is that having an HR specialist is very important for your business. You never know what situations may occur and not being fully prepared can have a negative impact on your business.

  2. Working without an HR department won’t be easy; ditching your human resources employees doesn’t mean you’ll be ditching your human-centric business problems, after all. Yet operating without an HR department isn’t the end of the world for your small business; just tough it out through the problems, be sure to take on the responsibilities of your missing HR department yourself, and strive to constantly be providing a comfortable working environment for your employees.

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