How to Optimise your HR Administration as a Small Business in 6 Ways

Person managing people on a laptop

Managing people is probably not why you started your own business, but effective HR administration is crucial to your business success. Whether you have a small team of two or manage a bigger team, the administrative side of HR is an essential activity not to be overlooked. From compliance to recruitment, your key HR administrative tasks are an opportunity and not an obstacle to success.

Scope of HR and administration for small business

Human resources encompasses a wide range of areas, which is why it can feel like a challenge to stay on top of as a small business owner. Your HR administration area can cover recruitment and selection, team management, long-term HR strategy, and payroll and benefits. It includes performance management and reviews, work health and safety, and compliance.

The most effective way to manage HR administration is probably to use a dedicated platform. You can find an abundance of HR software platforms, including cloud-based ones like Zoho People, ELMO and PeopleStreme, that encompass everything from recruitment and performance management to time and attendance.

HR areas to address

Whether you use a dedicated software platform, a combination of payroll and HR platforms, or a mix of paper records and software, your HR administration should be exhaustive and cover all relevant areas. Check to make sure you’re managing the following HR elements where applicable.

1. HR strategy and employee recruitment

Have an explicit HR strategy rather than hiring on whim. Your HR strategy should be framed by your business strategy. For example, if you’re projecting a certain rate of growth for the next year, you might be planning to make two or three hires in the coming months. Identify what skills you’ll need to add to your business, and identify how you’ll attract candidates, such as through online ads.

  • Job description – Always start with a detailed job description so you can conduct performance appraisal accurately while providing candidates with a clear idea of expectations.
  • Employment options – Consider how you’ll be engaging workers. You can choose to hire someone on a full-time or part-time basis, or have casual staff, temps, and contractors.
  • Hiring and screening – When it comes time to hire, you can keep track of applications, screen employees, and do background checks – especially police checks and right-to-work checks – with the help of candidate tracking apps.
  • Employment contract – Use a formal employment contract to reduce ambiguity and fulfil compliance requirements. An employment contract should cover key terms like hours of work, pay, holidays, and benefits. It should clarify expectations and obligations for both you and your employee.

2. HR handbook and employment policies

Develop an explicit employment policy to improve transparency and understanding. Your employment policy should cover things like disciplinary action, grievance procedures, code of conduct, and hours of work and other work expectations. The handbook could also cover things like company HR goals, equal opportunity, conditions of employment, and unacceptable behaviours.

Offer your employees a copy of your HR and employment policies as a handbook and make it easily accessible as a document on your intranet. You can incorporate your employment policy into your employment contracts, but don’t forget to update these documents if you make any changes to your procedures.

3. Training and development

Training and development tasks are an ongoing element of HR administration. You’ll need to align this to your current employees’ skills and any gaps you have in skills. Your training initiatives can include on-the-job and ad-hoc training, or they can be more formal, like sending employees to training courses.

Again, you can plan and track your training initiatives using apps. Work out how you can deliver learning on the job. Provide staff with the right skills to excel, and you could boost motivation and satisfaction.

4. Performance management and reviews

Performance management and reviews are vital HR tasks you’ll want to do regularly. You’re probably informally appraising your staff all the time, but you do need formal appraisals with a corresponding paper trail. Sure you’d prefer not to think about it, but if you ever need to terminate an employee or face unfair dismissal claims, your records can support your claims.

5. Payroll, benefits, and entitlements

Paying your staff a competitive market wage can help you avoid costly turnover. It’s vital to check you’re complying with recordkeeping and entitlements requirements. Provide employees with a pay slip each payday, and ensure your pay slips include all necessary details.

Keep detailed records of time, wage, and benefits and entitlements. Use a payroll app to keep it simple. Some payroll apps are integrated with tax reporting, banking, and pay slip functions, so explore tools that can help you streamline the process.

6. Compliance and legal

Compliance and legal administration overlaps with other HR areas like safety and employee contracts, but you should dedicate time and resources to ensuring your small business is fully compliant. Work legal requirements and risk management into your HR administration so compliance becomes part of your culture.

Keeping appropriate records about your HR processes is essential. You’ll also want to make sure you have processes and procedures in place for potential issues like privacy, anti-bullying laws, contractors, and unfair dismissal. Do an exhaustive audit of your business’s relevant compliance areas for HR and get advice from a lawyer if you have doubts.

Stay on top of your small business HR administration

Regardless of your industry, HR is a core function in your small business and you should ensure all administrative areas are covered. While it can seem like a lot of work for small business owners, working with advisors and using apps can streamline this critical function and allow you to optimise your business’s most valuable asset: your human resources.

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Person managing people on a laptop

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