What Every Small Business Owner Needs to Know About HR

This post originally appeared on the Louisiana Technology Park blog.

Companies in California saw a minimum-wage increase this year, from $10 per hour to $10.50, and there are plans to go to $11 on Jan. 1, with more increases until a $15 minimum is achieved in 2022 — if they have 26 or more employees. Those with 25 or fewer employees are also inching toward a $15 minimum, but one year behind larger companies. However, the city of Los Angeles has a minimum right now of $12 for most businesses.

Did you catch all that?

You may not have any employees in California, but chances are the payroll and human resources functions are no less complex where you are. As a business owner, you’re trying to build a company. You probably don’t have time to master HR at the same time.

But that doesn’t mean you can ignore HR issues. To find out how to get a better handle on small business HR, we reached out to Franny Oxford, vice president of HR for a privately held manufacturing company in Houston. Here’s what she had to say.

Outsource, outsource, outsource

As a small company you’re unlikely to have enough HR-specific work to justify an HR staff member yet. In such cases you need to hire someone whose business is HR so they can accomplish these basic functions, Oxford says.

“Do some networking, talk to other business owners, contact your local chamber of commerce and ask for some good consultant referrals,” she says. A part-time HR staffer is an option, but Oxford really recommends an outsider for now. “A good rule is one full-time HR hire for every 100 to 200 employees, depending on your industry, goals and turnover,” she says.

Oxford recommends performing a gap analysis to find out which areas you need assistance with: payroll, compliance, legal matters, benefits, employee relations, recruiting, performance management, etc. If you’re stumped by all of it, look for an HR generalist consultant.

You may need to hire more than one consultant or contractor; it’s fine to have more than one as long as they complement one another. “You should find people you get along with and who understand the needs and goals of your organization,” she says.

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