Integrating HR practices - when is the right time for small businesses?

Being an HR professional for over 10 years, and having all the knowledge and employment information I have in my brain, I often wonder how the hell do small business owners do it?! Human resources is such a broad and evolving industry, even immersing myself in it daily I still feel like there's so much to learn. So, how does a small business owner manage to stay on top of compliance, create an engaged workforce, maintain employment records, and manage recruitment and retention, on top of running the actual business? Well, in talking to some friends who are small business owners, it occurred to me - they’re not really. They are getting by in this respect, picking up bits and pieces from friends, the news, social media, etc. We talked about why this is and it seems that they just don’t know when or where to start.  

So, let’s discuss integrating HR practices. The most simple way to begin is looking at HR practices in 2 ways - reactive and proactive.  With reactive, you’re reacting to something, such as a legislative requirement or an issue observed, and then implementing a solution. With proactive HR you’re putting practices in place before any issues are identified, which helps to prevent issues from arising and can help bolster a positive work culture. Both reactive and proactive approaches can happen with or without an HR person on staff, and they can also happen simultaneously. Not everything can be predicted and sometimes reacting is the only option. Let’s discuss each in more detail.

Reactive HR

Since reactive HR practices are solving a problem, there are two main ways they come about. First, and most importantly, is in response to legislation. You’re implementing something within the business to ensure or maintain legislative compliance. Therefore, every business needs to incorporate some HR practices immediately, such as the policies, programs and training that all employers in Ontario need to do. These include; a written health and safety policy; a policy on accessibility; training on accessibility under the AODA, and WHMIS and health and safety awareness training under the OHSA. Once your business starts to grow, so do your basic requirements. Such as requirements around workplace violence and harassment - a policy and program are required for employers with 5 or more employees. Then once you hit 25 employees, you’ll need a written policy on disconnecting from work and electronic monitoring. There may also be regulations specifically for your industry or requirements under other applicable legislation, so make sure you’re aware of anything else that applies to your business, and stay on top of legislative changes. These will often result in changes being needed to your company policies or procedures.

The other aspect of reactive HR is responding to an identified issue or concern. Maybe some issues come to mind right away and you have a pretty good idea of where your concerns are. However, the solution or changes needed will depend on the issue and the company. The important thing to do when you’re responding to an observed issue is to determine what the root cause is. Once you know the root cause, you can determine what the best solution will be. This could be something simple like a new policy or employee training, or it could be much larger like redesigning your pay structures. One tip is to utilize an anonymous employee survey platform (like SurveyMonkey) to gather information. From there you can analyze the root cause of the issue and determine what practices would help.

Proactive HR

A company can (and typically should) implement more than just the bare minimum. Taking a proactive approach to anything is usually a good idea, and a growing amount of business owners are seeing the value in proactive HR. Implementing company policies, procedures and standard practices can help give employees structure, guidance and information. Without these in place, employees may feel confused and frustrated due to a lack of consistent direction or clarity. 

To be more strategic about HR, you’ll want to look at your business’s goals and values, future needs and overall strategy to determine what practices are of interest. Think about what would align or assist in attaining your company’s goals over the next few years. Maybe you have a strategic plan for your business. Examine how the plan will impact your employees and anticipate any challenges, pushbacks or needs from them. This will help you determine what kinds of proactive solutions you can implement for your employees. 

The strategic role of an HR partner is a growing trend in business. One report noted that businesses utilizing HR in planning and executing their business strategy has jumped from 36% in 2021 to 50% in 2024. As I mentioned at the very beginning, human resources is a broad industry and covers a huge range of subjects. Once business owners realize the link between their employees and the rest of their business, HR’s information becomes very valuable in strategic planning. The same report mentioned above also found that businesses are better at generating and implementing new ideas when they view HR as a strategic partner, rather than an administrative center. 

Conclusion

As mentioned at the beginning, both approaches often happen simultaneously and either approach is fine. However, in certain circumstances, having to keep putting out fires can be timely and costly to the company. Incorporating HR will look different at each company, and there’s no right answer. You could tackle it on your own, bring an HR person on staff, reach out to an HR consultant, or a combination of each!

Now, I might be biased, but I think all businesses should be incorporating some aspect of human resources pretty much from the get-go of owning a business. It doesn’t have to mean spending thousands of dollars, especially when you’re small, but instead working with an HR consultant on a fractional basis can still be very beneficial. If you don’t know where to start or what issues you need help with, reach out and book an initial meeting. Gray Owl HR can come out, learn more about your business, determine where your gaps are and suggest any necessary solutions.