A Comprehensive Handbook on Small Business Human Resources

Sneha Hull | August 30, 2021 | 193 views

Human resources are a subjective term to each individual and a business entity. Many small firms overlook human resource departments, believing them to be time-consuming, so they do not engage human resource specialists to assist with business operations. Instead, they attempt to manage the tasks either directly or by delegation to current workers. However, human resources benefit both the business and future workers. This blog gives information on small business human resources in detail.

According to connecteam, 54% of small firms manage employment and other human resource activities on their own to save money; nevertheless, this type of management presents several challenges and frequently blows up in their faces.

According to the Bureau of Labor Statistics, human resource management professionals will see a 10% increase in employment between 2016 and 2026.
HR is crucial in a small business from recruiting and retention through payroll and benefits. The shortcomings in any of these things result in:
  • Penalties for non-compliance
  • Inadequate talent
  • Inefficiencies that cause your manufacturing cycle to slow down
Above mentioned points define that you cannot underestimate the importance of HR support for small businesses.

Employees are one of a corporate organization's most valuable assets. So, it is needful to protect them. Therefore, human resources requirements for small businesses are essential.

Let us Know What Human Resource Management is

The Small Business Association (SBA) defines human resources as:

"The people who work for a company or organization"

"The department of a company that is responsible for managing those resources."

Human resource management (HRM) is concerned with your workers, whether they are hired, managed, or require other types of direction and support. Human resource management involve  significant duties; some basic human resources requirements for small businesses should be considered and fulfilled. They are those who establish the tone for how employees interact, resolve conflicts, and collaborate.

There is a new trend in human resource outsourcing, and some small businesses are deciding to outsource a significant component of their human resources.


Responsibilities of Small Business Human Resource Management

  • Recruitment and selection
  • Education and development
  • Compensation and benefits
  • Retention of employees
  • Creating an atmosphere that is safe, healthy, and productive
  • Cross-organizational communication

Benefits of a Human Resources Department

  • Ensure a safe and healthy work environment
  • Attract and retain high-caliber individuals
  • Maintain compliance
  • Access Human Resources Anytime, Anywhere
  • Improved Onboarding
  • Access to Employee Benefits at Large Corporations
  • Contribute to Time and Energy Savings

Fundamental Component of Human Resources

For small businesses, employing dedicated people in meaningful work can enhance performance, loyalty, and retention. Thus, in combination with the human resources manual for small businesses, the human resources department supports them in achieving their goals. This is accomplished, however, by increasing workplace happiness, making judicious use of existing resources, and developing an efficient expenditure model.

by boosting workplace satisfaction, judiciously utilizing available resources, and establishing an effective expenditure model.

With the clearly defined human resource policies and best practices for small businesses, you can assist workers in their growth and in contributing their expertise and knowledge for the growth of the firm.

Whether a small or a large business, the success of a corporation is highly dependent on its ability to manage both internal and external stakeholders successfully. The HR department very well accomplishes this.

Below Are Some Human Resources Requirements for Small Businesses.

Employee Records

Maintaining employee records is an essential aspect of the human resources manual for small businesses. Having it done guarantees that your business complies with labor rules and is protected in the event of a future issue.


Regardless of your business's size, it is requisite to gather and maintain these three papers for each employee to protect yourself and your company.

I-9 File: The US Government utilizes this form to determine and verify the eligibility of your personnel to work in the United States.

Personnel General File: This section covers the paperwork and certificates obtained from workers throughout the employment process. This includes resumes, verification of training, W-4 forms, payroll information, and disciplinary actions.

Medical Records of Employees: This file may contain doctor's notes, information on a disability, or information about a medical check-up. The information contained inside is confidential and must be kept secure against unauthorized access.

Employees Guidebook

Employee's guidebook is a vital aspect of small business human resources element. The handbook includes an idea of expectations, best practices, and requirements.

It also includes:
  • The organization's vision, objectives, and values
  • The code of conduct
  • The anti-discrimination rules
  • The safety and security regulations
  • The non-disclosure agreement
  • Work schedules (covering how to monitor time, take leaves, and notify management of leaves)
  • Other general information not required by law

Posters That Are Required

The nation's or state's laws in which your business operates may require you to publish information at your place of business or in an easily accessible location. Additionally, the Department of Labor (DOL) requires posting certain labor law posters in the workplace.

Parting Words

While many business owners believe that small business human resources costs are redundant, a human resource department may have a significant influence on your workers' well-being and the success of your firm. Unfortunately, many employees quit their employment due to poor or non-existent human resource management.

Frequently asked questions:

Does a small business need human resources?

Every business, regardless of size, must have a human resources department or at least one person dedicated to HR duties. HR simplifies many duties for business owners, allowing them to focus on other critical elements of operating the firm. In addition, human resources can do a variety of tasks that other employees are unable to.

What are the essential human resources requirements for small businesses?

Human resources are the bedrock to your organization because it is responsible for hiring skilled workers who appreciate your corporate culture. The most critical human resources requirements for small businesses to succeed are:
  • Employee documentation
  • Required posters
  • Employee handbook
  • Employee development and training
  • Employee benefits
  • Hiring process

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How to Choose the Right Small Business Accounting Software?

Article | November 25, 2022

Introduction With increasing complexities in financial management and migration towards digital technologies for accounting operations, advanced accounting solutions are gaining massive traction across the small business sector. Accounting software assists small businesses in enhancing their financial performance by providing higher accuracy, optimized payroll, automated transaction tracking, centralizing financial records, and others. However, it is crucial for small businesses to integrate the right accounting software as per their requirements to get the most out of the solutions. Since the market is full of numerous accounting solutions with different capabilities, selecting the one that is most suitable for your business can be overwhelming. So what are the factors that a small business owner should consider before looking for an accounting solution? Let’s see below. Select the Right Accounting Software: The Top 5 Primary Factors to Consider for Small Businesses Types of Software With multiple types of accounting software available, such as system software, application software, cloud-based software, and others, small business owners can opt for solutions that suit their operations and working style. If the owners operate in an on-the-go style, cloud-based software is best for them. But if the owners prefer to work from a single location, then the system software is appropriate for them. Learning Curve Until and unless small business owners are aware of the ins and outs of accounting software, using the software may seem complicated. As the high complexity of the solutions can result in costly errors, these owners should make sure that the learning curve for operating the software is not too steep. Features List Before small business owners start reviewing various types of accounting software platforms, they should take the time to brush up on the basics. It is crucial for the owners to make sure that the accounting solution has all the functionalities and features they need, such as inventory management, multi-currency support, payment processing, expense tracking, and others. They should also consider the add-on features that the solution provider can offer. Software Cost Accounting software varies in cost, depending on the number of users it supports, its tools and features, and other factors. The more specialized the software is, the more expensive it gets. Small business owners should compare prices between various accounting software providers and understand the exact amount and the process by which they will be charged. For instance, some of the companies charge standard monthly fees, while others have a single upfront cost with additional charges for add-on services. They should also find out if there are any hidden charges associated with the setup, customer support, and cloud storage. Customer Support A huge part of a reliable accounting solution is customer service. This is because small business owners need quick solutions and answers if they get stuck or have any questions related to the software. They do not want to be bounced around from representative to representative when reaching out for support. Thus, the owners should look for accounting software that offers excellent customer support and service. While selecting the solution, they should research and read customer testimonials about the software’s customer support. Begin Your Accounting the Right Way Efficient accounting is a crucial part of financial management, which involves tracking critical business activities such as accounts receivable and payable, invoicing and billing, bank reconciliation, reporting, and tax compliance, among others. It can be difficult for small businesses to get everything right, yet good accounting is fundamental for the company's growth and success. Choosing the correct accounting software is a crucial first step when getting started with the discipline. To get the most out of your accounting software, it is essential for small businesses to carefully consider their requirements, check the availability of features as per the requirements, and then select the accounting software that provides the capabilities they require for the greatest accounting experience.

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How Are Small Business Accounting Software Meeting the Industry Needs Today?

Article | July 16, 2022

Introduction Every business owner wishes to become financially independent when starting a business. To achieve that, it is crucial for the owners to manage their finances in an efficient manner. When done wrong, financial management, which is supposed to make a company's budgeting processes more efficient, has led to the loss of funds in many cases. Without sound financial management, small businesses may struggle to meet their objectives and might even suffer losses that could push them into insolvency. Financial management assists businesses in maximizing their market share, minimizing capital expenditures, maintaining proper cash flow, and improving profits. Accounting software plays a significant role in proper financial management and has become a vital need for all businesses today. With a better understanding of the inefficiencies of manual bookkeeping and the increased chances of error in finance tracking, business owners are increasingly shifting from managing finances manually to leveraging innovative solutions, such as accounting software, to improve their financial management. Why Is Small Business Accounting Software a Need for the Industry Today? In the course of a typical day, there are numerous tasks and responsibilities that must be managed and accomplished by small businesses by the end of the day. From planning to managing finances and accounting, a small business owner's back is full of a plethora of day-to-day tasks. As a result, keeping track of every last detail is nearly impossible for them, especially in accounting, where keeping track of every transaction is critical for managing business operations. Accurate and reliable accounting management is critical for small businesses and start-ups to ensure stable cash flow. As accounting software helps small business owners keep track of every single transaction along with other benefits, such as managing business finances, understanding profitability, and preparing tax statements, among others, it is becoming a necessity for small business financial management. Here are some of the other reasons why small business accounting software is becoming a necessity in the industry. Overcoming Manual Records With the growing number of transactions in the small business sector, it is becoming increasingly difficult for business owners to track and record income and expense data. As accounting software assists these owners to overcome manual work by recording the data directly into the page in real time and keeping a daily update of all the transactions, it is increasingly being sought by small businesses. Ease in Maintaining Transaction Due to the increasing customer inclination towards the adoption of digital payment solutions, small businesses are encountering numerous obstacles in maintaining all transactions from different online portals. Accounting software helps businesses leverage the bank feed feature to connect credit card accounts and the business bank, thereby centralizing and maintaining all transactional data in one place. Preparation of Reports and Financial Statements Keeping track of all small and large transactions and preparing financial statements, such as profit and loss statements and balance sheets, of these transactions manually is a tedious task and prone to errors. Accounting software automates the preparation of these financial statements and allows comparing transaction activity from prior months and years. As a result, it is increasingly gaining acceptance among small business owners. Increases Efficiency Accounting software allows small businesses to manage invoices and expenses, prepare for taxation, and keep tabs on all the financials, including payments, bad debts, upcoming dues, employee salaries, and others. Delegating all these financial management responsibilities to accounting software enables small business owners to focus on tasks that require their undivided attention, thereby boosting business efficiency. Bottom Line Regardless of the size of the business, every company strives to optimize its financial management, improve efficiencies, minimize costs, and simplify complex and tedious tasks. Accounting software can help small business owners achieve these objectives, along with eliminating time-consuming manual processes and redundancies, by automating accounting practices. Following this, the growing introduction of advanced cloud-based accounting software capable of providing real-time data access to business owners from anywhere at any time and on any device is expected to change the ways accounting is done in the small business industry in the coming years.

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5 Tax-Related Resolutions for Smarter Small Business Accounting in 2020

Article | July 20, 2022

Accountants working with small businesses often play the role of business advisors, especially when it comes to educating their clients about tax regulations and reducing their tax bill by taking all legitimate factors into account. We’ve gathered four tips that accounting professionals can use as a check-list to give to their small and mid-size business owner clients looking to make better financial decisions this year.

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7 BIGGEST ENTREPRENEURIAL MISTAKES

Article | February 11, 2020

This is the first post in a seven-part-series detailing the biggest entrepreneurial mistakes business owners make. The series will run over the next few weeks so check back to learn more. These are the 7 Biggest Mistakes I have seen entrepreneurs and companies make that can devalue their Intellectual Property (“IP”) portfolio, damage their brand, or sink a deal. If you are considering turning your idea into a business, read this carefully first. There are other mistakes you can make, but these are the deal-breakers. Any one of these can cost you big bucks, credibility in the eyes of investors and potential partners, and ultimately lead to evaporation of the value of your idea.

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