Staying on top of everything when you run a small business can be a lot for one person to handle. Especially if you have a lean team, where everyone is almost always an all-hands-on-deck approach.

Our in depth guide walks you through what you need to consider to grow your business without an HR team and how having a powerful HRIS system at your fingertips can help.

Do businesses need an HR department to operate in the UK?

In the UK it is not a statutory requirement for businesses to have an HR department.

However, this means that anything HR often goes to the line manager or business owner taking up a lot of time out of business as usual tasks and opening up risks to those who might not be qualified to make informed decisions.

How is HR in small businesses different from large companies?

In large companies where there are a lot of resources at hand, they may have several HR professionals in a single HR department with everyone covering a particular area of responsibility.

Whereas in small businesses, you might find one individual operating as an all-in-one HR department professional handling everything from the recruitment process to onboarding, company culture, offboarding, grievances and payroll. That’s a lot for one person to cover – these leaders are the unsung heroes of small businesses.

Examples of duties performed by a dedicated HR team

Recruitment and selection – finding the right fit

Finding top talent is crucial, even for small businesses. Tasks around recruitment include crafting captivating job descriptions, listing the job on job boards and managing the job advert and applications. Vetting candidates, conducting interviews and assessments to identify the perfect fit might also be part of the HR team’s duties. When it comes to a successful candidate, then the HR team will be responsible for checking references and backgrounds to ensure credibility, making the job offer‌ and onboarding the new hire.

HR teams might also be responsible for guiding new hires through policies and setting up their profiles in the HR system and payroll efficiently.

HR policies and compliance – stay in the know

Navigating HR policies and compliance is a core task of the HR team. This can involve developing clear and concise HR policies and an employee handbook, maintaining proper employee records and documentation, as well as conducting periodic audits to make sure compliance. This means that HR staff need to be familiar with employment law and company policies. Should a grievance arise, HR professionals have a formal role to play in grievance and disciplinary procedures and must conduct thorough investigations into any misconduct. They may also act as a mediator and help resolve conflicts amicably.

Employee engagement and wellness – creating happy, healthy teams

Creating a positive work culture can make all the difference. Very often, this falls under HR’s remit. From planning events and activities, to managing feedback surveys and liaising with senior leadership on new employee initiatives, there are a lot of hats to wear. At the end of the day, the HR team is the champion of a positive and supportive work environment, and they’re there to get the job done.

The pros and cons of HR duties being performed by an HR manager

There are a few pros to having HR duties managed by a professional, including:

• Dedicated HR expertise: Hiring an HR person brings specialised HR knowledge and experience to the business, making sure compliance and effective HR management.
• Efficient HR operations: A dedicated HR professional can handle HR tasks more efficiently, reducing the burden on other team members.
• Employee support: An HR person can act as a point of contact for employees, addressing their concerns, providing guidance, and fostering a positive work environment.

As well as a few cons, including:

• Costly investment: Employing a dedicated HR person entails expenses related to recruitment, salaries, benefits‌ and ongoing professional development.
• Limited capacity: A single HR person may struggle to handle the growing HR needs as the business expands‌ leading to overwhelmed resources and delayed processes.
• Over-dependence: Relying solely on one HR person may create a single point of failure, as their absence or departure could disrupt HR operations and leave the business vulnerable.

What are the benefits of a lean team

Embracing a lean team structure can be a strategic advantage for small businesses. While not having a dedicated HR team might seem daunting, it’s important to recognise the benefits it brings. After all, a lean team promotes agility and adaptability, allowing you to make swift decisions and respond quickly to changing circumstances.

It also fosters a closer-knit work environment, promoting collaboration and effective communication. By taking on HR responsibilities yourself, you gain a deeper understanding of your employees’ needs and can provide personalised support.

Moreover, operating with a lean team reduces overhead costs, allowing you to allocate resources more efficiently towards business growth initiatives. So, rest assured, you can thrive without a whole HR team by leveraging the flexibility, intimacy‌ and cost savings that a lean team brings.

What are the challenges of not having a dedicated HR professional?

Not having a dedicated HR professional can present certain challenges for small businesses. Let’s look at some of the most common challenges that can crop up for small businesses.

Compliance and legal risks 

Staying updated with employment laws, regulations‌ and compliance requirements can be time-consuming and complex. Without an HR professional, there is a higher risk of inadvertently violating employment laws, which could result in legal consequences and financial penalties.Managing employee records, maintaining confidentiality‌ and handling HR administrative tasks can be overwhelming without dedicated HR support. Proper documentation of employee information, contracts, policies‌ and compliance requirements becomes more challenging, leading to disorganised records and increased risk.

Hiring and recruitment

Finding and attracting the right talent can be a challenge without the expertise and resources of an HR professional. From crafting effective job descriptions to conducting interviews and assessments, the hiring process may be more demanding and time-consuming for small business owners.

Culture and retention

Creating a positive work culture, fostering employee engagement‌ and implementing strategies to retain top talent can be more demanding without the expertise of an HR professional. Developing employee recognition programmes and designing employee benefits that align with employee needs may require additional effort and research.

How can HR software help with managing your HR function?

HR software can be a valuable tool for small businesses in managing various aspects of their HR function. Here are some of the top ways HR software can support leaders with HR functions.

Streamlined administration HR software automates administrative tasks such as employee record management, time and attendance tracking‌ and document management. This reduces manual data entry, improves accuracy‌ and saves time, allowing you to focus on strategic HR activities.

Recruitment and applicant tracking HR software often includes features for managing the recruitment process, such as creating and posting job listings, collecting and reviewing resumes, and tracking applicant status. It streamlines the hiring workflow, facilitates collaboration among hiring team members‌ and simplifies the candidate selection process.

Employee self-service Many HR platforms provide employee self-service portals where employees can access their personal information, view and update their benefits, ask for time off, and access company policies and documents. This empowers employees and reduces the administrative burden on HR by enabling self-service capabilities.

Performance management HR software can facilitate performance management by providing tools for setting goals, conducting performance appraisals, and tracking employee progress. It allows for ongoing feedback, performance documentation, and helps identify areas for employee development and improvement.

Learning and development (L&D) Want to support your employees growth and learning but not sure how? Many platforms can sync with or even provide an L&D function. These can track employee training records, schedule training sessions‌ and provide employees with access to online learning resources. This helps promote a culture of continuous learning and professional growth.

Benefits and payroll admin HR and payroll, under one roof where they belong. By using an all-in-one platform, you can simplify benefits administration tasks, such as managing employee enrolment, tracking benefits eligibility‌ and calculating and tracking leave entitlement. It helps ensure accuracy and compliance in benefits management while providing employees with visibility into their benefit selections.

Reporting and analytics HR software typically offers reporting and analytics capabilities that provide insights into HR metrics and trends. It enables data-driven decision-making by generating reports on employee turnover, time and attendance, performance, and other key HR metrics.

Compliance and data security HR software often incorporates compliance features, helping businesses stay updated with employment laws and regulations. It can automate compliance reporting and ensure sensitive employee data is securely stored and protected.

While HR software can be beneficial, it’s essential to choose a solution that aligns with your specific needs and budget. Implementing HR software requires proper planning, training‌ and ongoing maintenance to maximise its effectiveness in managing your HR function.

Ready to see Employment Hero in action?

By now, you’ll have a great understanding of all the options you have available to you and your business.

If you’re ready to bring or keep things in-house, why not book a demo with one of our friendly team to see Employment Hero in action?