9 Crucial HR Skills for Startups and Small Business Owners

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When you start up a small business, you will have multiple areas vying for your attention. As you begin hiring employees, one area you need to ensure you are on top of is human resources. 

You probably will not have an HR department, which means it is crucial you master basic HR skills yourself, for the good of your employees and your business. 

Here are nine skills you need to possess. 

1. Designing a Great Onboarding Program

You must be able to design a great onboarding program if you want to attract and retain the right employees. 

Yes, you can use helpful tools for employee retention, but you still need to focus on the onboarding process if you want to hire the right individual for the job. 

Begin by ensuring the job description outlines exactly what skills and attributes you want your employees to have. Also, make it clear what the candidates can expect from your company. 

You can then much more easily find the right workers to fit your company culture and retain those employees for long periods of time. 

Crucially, an efficient onboarding process ensures all new starters go through a thorough orientation and have any of their questions answered. So, if you are orienting new employees yourself, having excellent communication skills, listening skills, and excellent attention to detail are all skills you need to possess. 

Spend time designing a structured onboarding program to ensure new employees are happy and understand everything they need to know about working for your organization. 

On the other hand, if you see taking new employees under your wing as a burden and skip designing an effective onboarding program, your employees will not be impressed from the start and are more likely to be unproductive and leave sooner. 

2. Coaching

Having excellent coaching skills contributes to good onboarding. Coaching skills are also helpful for one-on-one or group sessions with employees. 

If you have no formal training in coaching, it could be worth pursuing. When you learn how to coach effectively, you not only gain the best out of your employees’ development, you also learn the skills required for handling things like employee reintegration and conflict resolution.

3. Creating Contracts

Whether you have two or twenty employees, you need to follow all relevant laws. Many small businesses fail to come up with clearly defined and formal working contacts when hiring new workers, but if you fail to draw up proper employee contracts, you are breaking the law. 

So, do not overlook the importance of contracts for employees. 

And if you think you can simply use an online template for employee agreements, you need to think again. 

Good business skills involve knowing when to delegate tasks to other professionals. Therefore, always make sure an experienced lawyer draws up employee contracts on your behalf. When contracts are signed, both the employee and the business’s rights are protected. 

4. Handling Payroll Management

A crucial HR skill you need to possess if you are running all of the HR tasks yourself is managing payroll correctly. 

Payroll processing refers to paying your employees the money they are owed for carrying out their work. 

When handling payroll management, you will need to understand complex tax deductions and withholdings to ensure payment is made fairly and legally. You will also have to get to grips with things like overtime law. 

You can of course make life easier by using payroll management software or, better yet, hiring an accountant. But you still need to learn basic payroll knowledge and skills to ensure everything runs correctly and efficiently. 

5. Keeping Employee Documentation

Contracts and pay-slips are two pieces of important employee documentation. But HR is also responsible for a number of other employee documents. 

If you are handling all HR tasks yourself, you must have the knowledge and skills to ensure your business is compliant with labor laws and protected should any employee disputes arise. 

For each person that you employ, make sure you have his or her:

• I-9 file, which helps the government to identify and verify employees who are eligible to work in the country. 
• Employee medical file, which contains medical information about the employee. 
• Employee general file, which is for your own benefit. Use this file to keep all other documentation related to the employee, such as his or her resume, disciplinary action record, performance reviews, training verification, payroll details, W-4 form, and so on.

6. Properly Classifying Your Employees

You need to spend time learning how to properly classify your employees to ensure you follow legal rules correctly. The IRS has strict guidelines, so make sure you gain the skills to fully understand employee classification.

You need to know the difference between regular employees, temporary employees, full-time employees, part-time employees, and contractors, to ensure all required legalities are followed. 

7. Recording Employee Performance

It was briefly mentioned earlier that you should keep employee performance reviews in your employees’ general folders. 

Recording employee performance is an HR basics that you need to learn about. If you want to retain your best employees and keep track of productivity, keeping employee performance records can be invaluable. 

They can also be helpful for overseeing employee growth and development, resolving employee disputes, and handling discipline and termination.

8. Listening

If you want to create an effective team and improve employee retention, effective communication is crucial. 

Knowing the best way to speak to your employees, such as in a caring, friendly and open way, only accounts for half of communication skills. The other half is about listening. 

You should foster a transparent environment in which employees feel they can always provide feedback, suggest ideas, and talk to you about personal matters. You should encourage all of your employees to voice their opinions and express their concerns, within a moderated forum. 

Then, you must ensure you actively listen to your employees and react accordingly. 

9. Creating an Employee Handbook

To make all of the above easier, create an employee handbook that includes things like your company policies, company culture, feedback protocols, and so on. 

An employee handbook basically tells employees what you expect of them and outlines all the important information they need to know. 

So, spend some time crafting an employee handbook before you start hiring employees for the first time. 

Here are just some of the things that your employee handbook should include:

• Standards of Conduct. This should include sections on code of conduct, harassment, antidiscrimination policies, dress code, ethics, legalities, and so on. It should also outline the repercussions for employees who break the standards of conduct.
• Safety and Security. Keeping your employees physically and psychologically safe needs to be the top priority of any business. Your company must comply with the Occupational Safety and Health Administration’s rules and also have its own policies in place regarding things like crisis management and video surveillance. 
• Compensation and Benefits. This section will outline the benefits that you provide your employees with, including ones that are required by law and any others that your business chooses to provide. Include things like policies regarding Workers’ Compensation, disability insurance, leave benefits, social security taxes, unemployment insurance, and any state-mandated retirement plans
• Work Schedules and Leave. Your employees will want to have clear information about your policies regarding things like work schedules, paid time off, special requests, flexibility, absences, sick leave, and lateness. So, make sure you outline all relevant information in this section of your employee handbook. 
• Other Information. When your small business has policies and processes that differ from legal requirements, you need to fully define what they are in the employee handbook. That could include information about things like referrals and employee records. 

Do not just give new employees handbooks and leave it at that. You need to make sure that any new employee reads and understands the information included in your handbook. 

So, ensure every employee receives a copy of the handbook, reads it, and signs a statement acknowledging that he or she has read and understood the information the handbook contains. 

Summing Up the Most Crucial HR Skills for Startups and Small Business Owners

As a new small business owner, it is crucial you learn the various HR skills needed to run your business smoothly and successfully. 

By doing so, you ensure your business sticks to legal requirements, provides your employees with confidence and improves employee retention, and helps your business operations to run efficiently. Having good HR skills benefits you and your employees. 

Broadly speaking, HR skills fall into one of two categories: administration or personal. 

The former is to do with things like ensuring proper employee contracts are drawn up and providing employees with legally entitled benefits.  

The latter is to do with caring about your employees. That means listening to them and ensuring they work in a safe environment. 

When you spend time actively learning the HR skills that any startup or small business needs, the more you can ensure your venture is successful. 

So, to recap, you should have the right skills to:

1. Create a great onboarding program.
2. Coach.
3. Outsource tasks like crafting employee contracts.
4. Handle payroll management.
5. Keep employee documentation.
6. Properly classify employees.
7. Record employee performance.
8. Listen.
9. Create an employee handbook.

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