Do Small Businesses Need HR?

Posted by Florida Resource Management on November 25, 2022

We often encounter savvy small business professionals who ask us whether they need HR for their company. Some small businesses grow fast, but they have budget limitations, which require them to be very deliberate with how they spend money.

human resources

We totally understand that which is why Florida Resources Management offers specialized HR services to cover as much or as little as necessary for your business. Here’s why you should consider outsourcing some or all of your HR needs for your growing enterprise.

Is HR a Legal Requirement?

HR is not 100% mandatory, but it’s difficult to run a business, even with a small staff, without a system for payroll, contracts, discipline, and several other items. As soon as your company grows, you’ll notice how complicated it is to manage these things and remain compliant with various regulations.

It’s not unusual for businesses to fail, often within the first year, because of poor accounting and record-keeping. HR is a helpful tool for avoiding many obvious and unforeseen problems.

When Do You Really Need HR?

While the Small Business Administration (SBA) defines “small business” as anything up to 1,500 employees, you may not want to wait until you reach that level to implement HR.

One rule of thumb: once your company has about 15 to 20 employees, you should establish some kind of HR program.

By then, it’s too large and complex enough to micromanage everything alone as a sole proprietor or manager. Fortunately, if your business isn’t going to get much larger, you can hire a consulting firm (like Florida Resources Management) on a part-time basis. We can also help you if you anticipate growing into a much bigger business.

Benefits of Hiring a Professional Employer Organization (PEO) for Your Small Business

  • Outstanding Benefits Administration
    • You can finally get a grasp on payroll, benefits administration, and other crucial aspects of managing employees. It’s a multi-faceted topic, but if you don’t have a professional to facilitate it, you could run into lots of trouble.
  • Significant Help with Workers’ Compensation
    • Once you reach a certain number of employees, your chances of incurring workers’ compensation fraud increase. This is a major concern for small trade businesses like plumbing or construction companies.
  • We Can Draft Policies & Procedures
    • Do you need to create an employee handbook, safety guidelines, or some other critical documentation? Those are important items that require substantial knowledge and expertise. Otherwise, you risk leaving your business vulnerable to lawsuits and other trouble by having questionable (or non-existent) policies and procedures.

If you’d like to leverage these advantages for your company, then it’s time to explore your options with Florida Resources Management. We help small and medium-sized organizations master HR, reduce risk, and minimize waste/redundancy. You can learn more about our services by calling us at 941-343-6160.

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