HR Guide for Businesses

Putting your human resources (HR) processes in place is crucial to your company’s long-term success. Getting HR right offers you a huge amount of value – from making sure your employees are engaged, happy, and not over - or under-worked, to being confident that you’re compliant with employment law. Our HR guide for businesses will walk you through the essentials, so you’re ready to improve and enhance your company’s HR practice.

What is HR?

Human Resources refers to the recruitment, management and development of your employees, and also covers labour relations.

A business doesn’t need an HR department to do these things – but as you grow, it certainly helps make the process more efficient.

Organisations approach HR in different ways and use their HR teams for different activities. For instance, in some companies, HR takes responsibility for disciplinaries, while other firms choose to keep that between the employee and their line manager.

What does the human resources department do?

An HR department’s remit can cover a wide range of tasks and roles, depending on the size of the firm and the industry it works in. That said, the following tasks are covered in some capacity by most HR departments:

• Recruitment and promotion
• Negotiating compensation and benefits
• Inducting new hires
• Coordinating staff training
• Developing policies for personnel
• Overseeing employee health and wellbeing
• Improving staff morale and organising ‘away days’ and other events
• Labour relations and being the first point of contact for any injuries or accidents

Why is human resources important for a business?

Human Resources offers multiple advantages to a business – both for employees themselves and for the company, more generally.

For employees, having an HR department (or at least some formalised HR processes in a smaller company), gives them a range of benefits. First, an HR department ‘takes care’ of your employees’ problems. If someone is underperforming, feels they’re being bullied, or wants to negotiate a pay rise, having a somewhat neutral person they can go to and discuss these issues with makes them feel heard and lets them resolve any problems transparently.

An HR department also offers a wealth of benefits for an employer. A good HR team can mediate and resolve most labour disputes, meaning you can get your performance back on track quickly, and even avoid any unwanted court cases. The department can also take on responsibility for any legal and compliance issues around employment law and can manage much of your admin work – from employee induction to expenses, to maternity leave and more.

HR processes for businesses

Here’s a closer look at some of the most common HR processes that businesses carry out:

• Recruitment

  The recruitment process involves monitoring staffing levels, creating job specs, sifting through applications, performing interviews, hiring candidates and helping them settle in.

• Annual reviews

  The annual review process gives employees the opportunity to assess themselves against any agreed objectives/targets that have been set in the previous 12 months, and discuss their performance with their line manager.  

• Pay and compensation

  Most HR departments work closely with the finance team to ensure payroll is completed on time. They also manage the negotiation and payment of benefits and calculate staff bonuses.

• Organising training

  The HR team will usually be responsible for monitoring staff development and promoting training to both staff and line managers.

• Business culture

  This process could involve anything from solving a dispute between employees, to booking a venue for the Christmas party.

HR forms for businesses

As your business grows, you’ll find many of the same HR tasks coming around. By compiling several HR forms and storing these in a central place, you cut down the time it takes to resolve common issues. If you can make these forms digital so they are accessible anytime from a company computer, the process will only become smoother (and save you maintaining huge filing cabinets).

Here’s a list of the most common business HR forms:

• New hire details form

  When a new person joins the company, you’ll want to collect certain information about them. The form asks the new employee about their needs – from equipment to clothing and any personal, disability or religious requirements. It also allows you to collect essential information such as address, next of kin details, and most importantly for the employee, their bank details.

• Exit interview form

  When somebody resigns, the business can learn a lot of valuable information about why they’re leaving to improve the experience of its staff in future. This form should contain a series of questions to put to the employee to find out whether they were dissatisfied and why, things their manager could have done differently and what they thought of the company culture.

• Holiday request form

  By formalising the holiday request process, the process will feel a lot more transparent and fair to employees. Make this form simple and easily accessible to staff so they can complete and submit it swiftly.

• Expenses request form

  This form allows employees to request reimbursement for any expenses occurred while out on business. They’ll need to fill it in carefully and provide evidence for their spending.

• Annual review form

  This form is given to the employee in advance of their annual review and helps them think about their goals, current performance and any issues they’re experiencing.

HR tips for small businesses

It’s not always necessary or cost-effective for a small business to have its own HR department. With that in mind, here are some tips for small businesses wanting to succeed with HR:

• Consider outsourcing

  There are many specialist firms offering outsourced HR provision for businesses of all sizes. A contact there can advise you on what you need to do to get things up and running and provide you with a range of ready-made services.

• Create an employee handbook

  Put together a handbook which describes to all employees what is expected of them, and what they can similarly expect from you. In the handbook, provide clear explanations on any tasks they may need to complete, from requesting holiday to escalating a complaint about a colleague.

• Create an ‘open’ culture

  Many of the tasks that HR departments deal with could be resolved simply by allowing employees to be open about any problems they’re having. If staff feel they can approach their manager or even the founder, most issues can be sorted quickly and at a minimal cost to your performance.

• Communicate

  An internal comms system – be that via a dedicated intranet, or even just a company group chat – can provide the essentials for a productive and positive company culture. Regular ‘away days’, socials, and even team lunches can work wonders for your staff morale.

• Comply with essential laws

  Get up to scratch on the essentials of employment law. This guide from the CIPD, the UK’s professional body for HR, will help you be sure you’ve got your bases covered.

• Get insurance

  Employers' liability insurance is a legal requirement if you employ staff in your company. A business insurance package policy will typically include employers’ liability insurance. This will protect you where there are allegations of negligence against you for illness, disease or bodily injury to your staff arising out of their employment activities. The policy includes legal defence costs, and will pay compensation to the injured employee in the event of you being at fault.

Your most important asset

It’s a cliché but there’s truth to the notion that your people are your most valuable asset. Strong HR processes will ensure that they are protected, safe and happy – and that you can get the best performance from them.

About the author

Alison Wild BCom (Hons), FMAAT, MATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (ATT) and also has over 20 years' experience as a residential landlord.