Human Resource Management – What Every Business Owner Should Know

Good HR ManagementWhether you are managing your own human resources internally, or you are contracting out to a professional employer organization (PEO) or other human resources management (HRM) group, there are a number of functions your HR department needs to be able to fulfill. Your human resources team is responsible for recruiting new talent as well as providing for your existing team.  Your HR department needs to be able to prepare payroll each week, calculate and submit taxes, arrange for benefits and retirement options, and much, much more.  Here are some essential tips for running a tight operation.


When hiring, remember that quality is more important than quantity.  This is a suggestion often given to job candidates when submitting their resumes.  Just as job candidates achieve better results with precision, so do hiring managers.  Your hiring managers need to know exactly what they are looking for, and where to look for it.  If your human resources staff does not include experts in hiring, you may want to consider outsourcing this operation.  Expert recruiters and headhunters can actually save your company money by locating better talent.

How much time and effort have you invested into your employee onboarding process?  Employers commonly neglect onboarding procedures, not realizing how critical they are to avoiding misunderstandings later and orienting new employees comfortably as part of the team.  Have a clear book of rules for new staff members, provide orientation activities and one-on-one time with management staff, and make sure that new employees understand their role in the corporate culture.  Also remember to provide ongoing training for staff members who have been in their roles a long time, and to conduct regular employee evaluations.

Corporate Culture and Conflict Resolution

One way to retain your employees is to ensure that they are happy while at work.  Come up with ways to bring together the team and forge strong working relationships among co-workers.  Organize corporate parties, awards ceremonies, and other events that provide recognition to individuals and project teams for their efforts.

The best HR practices go beyond the day-to-day tasks and also encompass an attitude of fairness and balance.  Do your human resources staff treat all employees in a fair, objective manner, or do they give preferential treatment to management staff?  Human resources managers need to be taught to see other management staff members as employees like all others—this is the only way to ensure that everyone is doing their part and the workplace is a level and fair environment where everybody can thrive.

Human resources is often looked at as a “touchy-feely” department by other members of an organization’s staff, but the reality is that HR employees make many challenging decisions each day, and they need to be able to handle those hard choices.


Have a wide array of benefits plans available to your employees to choose from.  This can be a tricky legal area to navigate, and is one aspect of HRM where outsourcing can be particularly useful.  Outsourcing to a PEO gives you the benefit of legal expertise on issues like worker’s compensation and healthcare plans.  Find ways to effectively communicate with your employees about the health insurance and wellness options which are available to them, as well as different retirement plans they can choose from.  Healthcare in particular is going to be an increasingly complex area to navigate in the coming years with healthcare reform on the horizon, so put special emphasis on working out this aspect of HR.

HR Outsourcing

There are a wide range of human resources outsourcing options.  Before computer software became as advanced as it is today, outsourcing your HR department traditionally meant partnering up with employees HR staffing agencies.  While some PEOs still take this form, many payroll outsourcing companies offer you the chance to continue managing your operations internally, but provide you with the software to make it fast, easy and error-free.  This software can be used to prepare your payroll for your employees and calculate and send in your taxes each year.

Employee leasing is accessible to large and small businesses.  There are many different pricing schemes out there, so be sure to investigate your options thoroughly before you make a decision to partner with a PEO.  There are also a wide range of services.  Watch out for hidden fees, and make sure you understand where the responsibility lies for human resources management decisions.

Outsourcing Checklist

Before you choose to sign a contract with a PEO or some other staffing organization, you should run down a checklist of requirements to make sure you are making the most suitable choice for your company.  There are many different types of organizations providing a wide variety of services, so it is essential to put some careful thought into this aspect of HR planning.  Remember, outsourcing isn’t the right choice for every company.  It may be something you want to do now, or it might be something you should consider for the future when you are ready for it.

  • Research the reputation – Any PEO or employee leasing firm which you are thinking of using should be able to provide you with references, tell you how long they have been in business, and provide information concerning financial resources.  How good is the customer service?  If you call them up or go into their office to speak to them in person, are you treated with respect and patience, and are your questions quickly and transparently answered?
  • Figure out all the services you need – Services such as payroll, taxes, worker’s compensation, benefits selection, recruitment, onboarding, and so forth.  Make a comprehensive list before you start your search, and then check to make sure all the services you need are included before you sign any contracts.  Some employee leasing firms can handle all of these, while others specialize in just one or two services, like payroll and taxes.
  • Check the software – Check to see if the software used by the outsourced HR department will be compatible with your existing solutions.  If not, how long and difficult will the upgrade be?
  • Know the details – Will the PEO be a “co-employer”, or will you be outsourcing to an HR organization which simply provides you with some services on a contracted basis?  Who will assume liability in various situations?
  • Understand the costs – How much will the outsourcing cost your organization?  Will it fit within your budget—will it save you money, or ultimately cost you more?  Are you billed once a month at a flat rate, or are you charged a fee for each of your employees?  Are there other hidden fees and costs?

Perhaps the single most important thing to keep in mind about HRM is that human resources management is never a “set and forget” solution, no matter how you decide to structure your organization.  On the contrary, your human resources department is the heart of your company.  Whatever products or services you create or sell, your company’s success ultimately depends on the human element.  If your staff members do not perform or you cannot retain them, your revenue will suffer, and that is the fault of your human resources team.  If your employees are talented, efficient and happy, you will be successful, and it is your HR department that is responsible for making it happen.

Speak Your Mind