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4 Reasons it Might be Time to Start an HR Department

In Human Resources — by Helen Sabell

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Over the past few decades, the human resources department has become a vital part of successful companies all around the world, and its importance is only growing. According to the 
Bureau of Labor Statistics, HR manager positions are projected to grow at a rate of nine percent over the next eight years, far outpacing the average five percent growth rate across all professions.

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The most successful HR employees love working with people, and they’re great communicators. They keep track of paid time off, health insurance, company holidays and worker’s compensation claims. When employees need to report a serious issue such as a theft or harassment, HR professionals handle the issue efficiently and effectively. HR workers also recruit new employees to fill open positions within the company.

If tasks like hiring, EEOC compliance and benefits administration are beginning to impact your (or your employees’) ability to do your “real job,” you may want to consider bringing on some dedicated HR pros. Here are four reasons it might be time to start an HR department.

They can definitely give you a hand in hiring

When you think about HR, you think about recruiting and hiring, right? Between setting up a hiring process, building a candidate pipeline and interviewing, recruiting and hiring can be a lengthy endeavor that involves a lot of moving parts. A dedicated HR professional can relieve the pressure: It’s their job to find potential employees, convince them to apply and show them why working for your company is in their best interests.

The best HR employees know where to find great employees and they know how to weed out the good ones from the great ones. HR employees use a number of methods – including job search engines, social media and employee referrals – to source quality candidates.

HR professionals are also experienced interviewers who can pick up on subtleties others may miss. An hour may seem like a lot of time to interview a candidate, but it’s a drop in the bucket compared to their tenure at a company. Your HR employee can make the most of the interview time: They know what resume red flags to look for, they know what a fishy recommendation sounds like, and they can determine whether a candidate’s goals are in line with the position and the company.

But it isn’t just about hiring

Hiring is one of the most crucial aspects of HR, and a fulfilling one, at that. For many HR employees, extending a job offer to a candidate is one of the most rewarding aspects of the job. There is, however, the other side of the coin.

HR employees are often in charge of firing people as well as laying them off. If an employee’s performance is consistently poor, or they break company policy, the HR team will handle firing them. In the event of a round of layoffs, the HR department will also inform all those who have been let go and help them understand what they’re entitled to and how the layoff process will work.

No one likes delivering bad news, but it’s part of the job. A good HR employee needs to be both firm and compassionate. An employee receiving bad new may act out irrationally, and an HR employee must be ready to handle anything.

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The therapist is in

If an HR pro is effective at their job, they’ll receive a steady stream of employees from all departments who want to come talk regularly. The HR department helps employees feel successful in their positions. When employees are having trouble with their colleagues or even the bosses, many feel that an HR employee is the only safe person to talk to.

 An HR professional’s insight and understanding can help employees work through their problems. HR pros receive mediation training and can help two conflicting team members come to a successful resolution that benefits both parties and keeps the office environment happy.

The HR department doesn’t directly bring in money, but can still affect the bottom line

You know that the HR department is responsible for bringing in new recruits and keeping current employees updated and in line with company policies. As such, the department doesn’t bring in any profit like other departments do. Because of this, when a company isn’t doing well, HR is sometimes one of the first departments to get hit with cutbacks. If a company is particularly small, then they might go to a recruitment agency to hire new employees and dissolve the HR department entirely.

This may not be the smartest allocation of resources, however. Inevitably, recruitment agencies won’t have the same ability as an in-house HR department to make internal hires – team members who are already employed at the company who may be ready for a new position within the organization. Internal candidates already have institutional knowledge, have proven themselves to be cultural fits and usually get up to speed in their new roles more quickly than their external counterparts. In-house HR pros can identify current employees who are primed for a new opportunity.

Additionally, recruitment agencies bring with them high fees that can outweigh the savings an in-house HR employee costs, especially if you’re hiring in volume. It’s common for an agency to charge 20 percent of an employee’s salary once a new hire is made. For high-level executive searches, some recruitment firms require a 35 percent retainer fee of the position’s projected salary.

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HR often takes a backseat at small businesses, with traditional HR activities being distributed across the team. But if you’re scaling quickly enough, inevitably the time will come to invest in a proper HR department. As with hiring for any new role, there are challenges involved. But it’s an investment you’ll be glad you made.


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