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  • Writer's pictureCarrie Free

Why Your Small Business Needs HR

Far too often, small startup owners treat human resource management as an afterthought. Budgets are limited and team sizes are small, so why should it be a priority in this stage to set up HR policies? Can’t that wait until later?

The reality is that setting up an HR plan for your company in its earliest phase is crucial to the growth of your company. Strategic HR will help you establish a healthy workplace culture that will unite your team and sustain your business as it evolves.

Hire, train and retain the right people

Talent acquisition is a key element of HR strategy. It may be tempting to take the reigns and handle every step of the hiring process on your own. However, HR specialists have the training and experience to attract, interview and onboard the right people to help your business meet its long-term goals.

“Startups often hire people in their personal network, which leads to informal hiring processes and minimal onboarding,” said Darren Perucci.

When you enlist the help of an experienced HR professional, you broaden your pool of prospective hires immensely and open yourself up to a greater array of talents and perspectives.


“A formal, standardized hiring process helps to prevent many of the common problems that occur in fresh companies, especially in the case of conflicts between owners and employees. HR procedures help to ensure that the right people are working for you and understand their expectations.” — Carrie Free, Founder and President of HR1 Consulting, LLC.


An informal hiring process tends to lead to confusion among your employees, a lack of proper training and misalignment with your goals and vision for the company. A more formalized process based on HR best practices will save your small business countless headaches and keep you on the fast track to success.

Poor training and onboarding also negatively impacts employee retention. If members of your team are not provided the proper resources to operate efficiently, they’ll likely search for other opportunities.

Another key factor in employee retention is satisfaction with benefit and compensation programs. A strategic human resource plan accounts for competitive pay and benefits that incentivize and motivate quality employees to stick around.

“If you want to keep your people loyal and motivated to bring their best performance to your company, you have to keep their needs in mind and make sure you’re taking care of them,” said HR1 Founder and President Carrie Free.

Establish culture and resolve conflicts

Another core function of HR is to establish a positive organizational culture. It’s important to communicate the values and goals of your company to employees early on and provide a unifying vision to your team. A strong culture helps to ensure that your startup practices reflect your beliefs.

“Your culture is the formula, the DNA that provides guidelines, boundaries and expectations for your team and your customers, and is the primary platform to inspiring and motivating your people,” said Peter Ashworth, Chief Marketing Officer at Wells of Life.

The earlier that your organization is provided with this philosophical blueprint, the easier it will be for your culture to grow with your business and be consistently upheld.


1 in 5 U.S. workers have searched for a new role due to the culture in their workplace. (Society for Human Resources Management, 2019)


Human resource management strategies also sustain harmony in the workplace by providing policies and processes for settling conflicts. When arguments between employees escalate, productivity is often derailed and your workplace culture is negatively affected. HR specialists can help your business nip conflicts in the bud and prevent recurring problems.

Manage risks and protect your business

Human resource strategies also exist to protect your business form unchecked risks and legal issues. In the earliest stages of a company’s development, miscalculated risks can pose a serious threat to its survival. A sophisticated HR plan serves to assess, analyze and tackle risks before they become a danger to your organization.

Risk management strategies involve keeping up performance quality, defining clear roles for employees and ensuring compliance with all legal requirements. The Forbes Human Resources Council explained that “small businesses can never eliminate risk altogether, but they can prepare for it in advance.” HR infrastructures exist to prepare businesses for situations that could otherwise be damaging.

A major part of preparing for and preventing unnecessary trouble is compliance with local, state and federal requirements. HR specialists have a unique understanding of these requirements and provide processes to ensure that these mandates are met.


“Many businesses choose to outsource certain HR functions to help mitigate these potentially costly HR pitfalls. Doing so can mean having access to experienced professionals who serve as HR compliance resources and can provide in-depth, up-to-date knowledge of federal, state and local laws and regulations.” (Paychex, 2019)


Are you ready to start implementing human resources strategies?

HR1 Consulting, LLC Founder and President Carrie Free has over 20 years of experience establishing and implementing effective HR infrastructures for businesses of all sizes across various industries. If you’d like to learn more about how HR1 can provide your organization with the tools it needs to grow and meet its long-term goals, contact us here.

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