Small businesses rely heavily on people. And because of this, their HR departments are crucial to their success. But too often, small businesses are let down by their HR departments. The problem is that HR goes well beyond merely managing staff payroll. It’s fundamental to the strategy of the enterprise itself. Here are X ways your HR department can make or break your company.

Performance Improvement

HR departments should, ideally, construct an index of employee performance. Managers should be able to go to HR and find out if employees are providing good value for money. Being able to identify who is valuable and who needs to increase their value is critical for profitability. HR departments, therefore, need to come up with ways to measure employee performance. These measures need to be straightforward and easily understood by management. And they need to quantify the improvements that have to be made. HR departments that don’t do this risk letting their companies slip into an unprofitable state.

Training And Development

Modern small businesses rely heavily on training for success. As the economy becomes more advanced, highly trained workers are becoming increasingly important. Companies whose staff are not well-trained risk being left behind by the rest of the industry. That’s why so many businesses are turning to HR consultants, like Ellis Whittam. They want to know how best to train their staff and move their businesses forward.

Corporate Image

Small businesses are dependent on the talent that they can attract. A small business without the right people is not much of a business at all. That’s why companies put so much effort into maintaining a positive corporate image. They want to be seen as a great place to work so that they attract the best people.

The job of making a company a great place to work is down to its HR department. First off, HR has to have the ability to sell the company as a great place to work. They need to emphasise the fantastic working conditions. And they need to make a point of the fact that the firm is a great place to progress. But they also have to ensure that they retain their best employees.

Budget Control

The biggest cost for practically every business is the combined cost of employing people. Workers cost a lot of money in wages, admin, and benefits. And so it’s incumbent on HR departments to deliver savings where possible. Inefficient HR can make or break small businesses, just because of the costs involved. Slow HR departments require extra money themselves. And departments that don’t innovate don’t find special deals on employee benefits, like health care.

Employee Happiness

Lastly, the job of a great HR department is to make sure that employees are happy and satisfied. A dissatisfied workforce is the enemy of business, especially small business. Organised HR departments track employee happiness and identify things that reduce satisfaction. Then they look for ways to improve satisfaction, based on what they find out from employees themselves. When they don’t, morale can suffer, and businesses can ultimately fail.