Small business milestones mean different things to different people. For some businesses, it's the first million in sales. For others, it's the big account that makes an office space or a slew of new hires affordable, or it's the first round of angel capital that greases the gears.
But from a risk management perspective, from where I'm sitting, "success" is that weird inflection point between being small enough that the entrepreneur or the owner has enough time to run payroll, fill out all the boring tax and onboarding forms, and all of the other HR functions of a small business, and where they don't - but there aren't exactly enough people in the office/garage/shared cubicle in a corner of somebody else's warehouse to justify hiring a full-time HR person who generates no sales.
So what do you do?
...Click the link below to read more.
But from a risk management perspective, from where I'm sitting, "success" is that weird inflection point between being small enough that the entrepreneur or the owner has enough time to run payroll, fill out all the boring tax and onboarding forms, and all of the other HR functions of a small business, and where they don't - but there aren't exactly enough people in the office/garage/shared cubicle in a corner of somebody else's warehouse to justify hiring a full-time HR person who generates no sales.
So what do you do?
...Click the link below to read more.
Option one is to hire a part-timer. Your payroll functions are probably already outsourced to ADP or somebody like them, so you'll only need somebody in a couple of times a week to take care of the routine functions for a staff of less than fifty. Should be fine, the internet tells me that I'm below the headcount threshold for some of the more difficult compliance regimes, so what's the big deal?
First of all, no. Many states have equivalents to the federal discrimination and even healthcare laws that have very different headcount cutoffs - like ONE instead of fifty. Which is just part of the problem. Many entrepreneurs' only experience with HR is from their former job (in a non-HR role) where HR's only visibility to the general workforce is as the employees who fire people, process tax information, and handle inter-office disputes. They don't see the behind-the-scenes work juggling multiple inconsistent tax regimes, training and advising owners and supervisors on everything from discrimination laws to how to deal with new state laws, dealing with nexus issues for every new hire, recruiting, evaluating, building corporate culture and structure, and dealing with tax forms, firing people, and handling inter-office disputes.
What it comes down to is that a data entry person for tax forms is easy to find, but finding a good HR person is hard. A comprehensive, experienced person who has the skills and experience to not just handle the most on-the-ground risk management position they make, but do it well, is much rarer than most small business people think.
Small businesses hire HR badly (and experience the inevitable regulatory issues, spike in unemployment premiums, and potential EEOC, Department of Labor, and even litigation issues artfully misconstrued as "nuisance suits" by the business owners who should have known better - and would have, if they'd known that they were looking for.
That's the problem. Like I said, most small business owners only know about HR from what they saw it doing at a previous job. What you don't see HR doing is keeping the engine of your business running safely, having a full-time job reducing your liability profile, and keeping your insurance carrier off the bottle a little while longer just by existing, as some guarantee that you are at least thinking about the risks that growth necessarily drops on your desk.
When you contract out HR work to a consultancy or professional firm, even if it's only part-time, you at least know that you are getting someone who can fill in the gaps of what don't know that you don't know. If you're a entrepreneur who came from any world other than HR, you probably have no idea what 90%+ of a good HR person's functions even are. You don't know what the laws and regulations are; how could you possibly be expected to coach a temp or a part-timer in obeying your internal compliance regime if you don't even know what you're supposed to be complying with?
Our philosophy at C-Squared is that, when you spend your hard-earned money on a consultant, you don't just get a warm body in a chair for data entry. You need experienced professionals who know what they're doing to build a compliance plan you can take with you long after the consultants are gone so you can pick the right people and train on the right material. Contact us today to learn what a good risk management team can do for your business, beyond peace of mind, beyond the HR face you saw at your last job.
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