Internal HR People

I suspect quite a high percentage of very small companies (60%?) simply hope they'll never make a bad recruitment decision, have to make a worker redundant and so on.

HR matters usually get dealt with by the owner or his / her PA - whether they've relevant backgrounds or not. There's heavy reliance on networking to find good staff, locate training courses and find answers to specific HR problems and questions.

The small companies concerned to protect themselves from potential HR problems seem to subscribe to the Croner law updates service or similar competitor services. Such services often include access to a human advisor for an extra fee.

My "gut feeling" is that most companies would only take on a part-time HR professional when they've got 20 or more staff.

I provide "in-house" recruitment and psychometric assessment services for SMEs recruiting key staff - the take up of these services is mainly with businesses which are much more sophisticated and ambitious than most or are having difficulty in deciding which of two good candidates is the better bet for the company.

Companies that really don't want to do their own recruitment unaided often rely on recruitment consultancies to do the job for them. They're often not very selective about the consultancies they choose to work with. They rarely brief them well.

Hi SharClar, good topic!

Will confess to winging it when it comes to HR and falling back on corporate experience managing people, although did get employment contracts drawn up.

Have had to fire/let go about 6 people over the last few years. As long as you are fair, give monthly appraisals for new starters, feedback honestly, make it 2 way, and get them to sign it, have a decent probation period, then you can't go too far wrong from my experience. Although this was hard learned after being threatened with a tribunal after laying someone off in my corporate life

Think Linda's right, will prob be 20 employees+ before you even consider the overhead expense of an internal HR person.

From my experience most persons only pay attention to the HR department when things go wrong, but it's important to have competent and professional staff in place to handle any situation that may arise - as well as to provide input and make improvements when necessary to prevent things from going wrong.

I totally agree with you. Outsourcing is the best way to reduce costs.

I can understand the temptation to outsource HR personnel if the staff is relatively small, but as you expand, you should really focus towards hiring in-house HR not just for better workplace compliance training, but for reasons being that employees will have an easier time communicating face-to-face with the HR staff. Albeit, the HR team has sufficient training and the means to deliver proper training videos the staff underneath them. Many times there are instances of "on-the-fly" lessons when a problem arises, rather than preparing the office beforehand. Companies can manage this through better, more customized e-learning procedures.

Guess I better wade in considering this is my field. Most small businesses I come into contact with generally have waited until something has gone wrong before identifying that they do need some support with their compliance with employment law.

Generally 3 reasons for this

1) The primary reason is cost, especially for startups with low or no investment money is tight and they literally cannot fund the money for the support. Rarely do I get asked to go for a consultation where they have less than 4 employees. Most HR consultancies (not us I am glad to say) will charge a minimum amount as they look short term. We charge by the head, no minimum as we see a relationship as a longer term thing, we charge less now in the hope that our strong service will retain a company when they have a larger budget allocated at HR. Its a shame more HR consultancies don't work like this as they are really pushing the smaller SMEs out of options to get this necessary support

2) Bad PR for HR. This is a horrid one to say but Human Resources as a field has only more recently started to work on how it is seen by others and demonstrating the value that a good HR department can provide. Up until recently HR was an obstructive admin department when really their benefit (especially financially) is huge if your HR department works preventatively and proactively.

3) Lack of knowledge. I wanted to use the word ignorant to describe this one but it did seem a bit extreme. A lot of people fail to get the support they need as they just don't care to find out and then continue working in a way that puts them at high risk. In previous years this was fine as if someone got fired they got a new job the next day as the market was so affluent. Now we have hit on hard times the jobs are harder to find and people are more likely to raise a tribunal claim as they cant jump into something else the next day.

I don't want this to be an oversell of using consultancies but the reality is HR is now splitting into specialities (a necessary evil due to employment law being so expansive) and even when you can hire an internal HR person they will still lack the skills or experience to cover everything, at least an HR consultancy will be able to draw on the experience from its consultants at no additional cost to you (hopefully)

The role of HR and its function is yet to be synthesized by small firms. this is one of the reasons why they do not think HR is important. However, according to statistics, firms that make use of competent HR are known to record good profits as compared to those that do not. HR are vast and updated, they are mostly relied on for choosing portfolios that are profitable.

I think that HR staff is still underestimated when it comes to importance. Businesses are trying to save from salaries, but would that lead them in the right direction?