Hi, I’m Ed Boylan, and I’d like to talk with you today about the importance of Human Resources in your business. In the movie Butch Cassidy and the Sundance Kid, Robert Redford turns several times to Paul Newman and asks about their shadowy pursuers that they cannot shake. “Who are those guys?” The field of Human Resources – HR for short – is something like that.

Most of us have experience with human resources: filling out an application, getting paid, signing up for benefits, etc. But most people don’t really know all of just what those human resources people do. Most if not all small business owners don’t understand how they can use human resources within their business plan. Many if not most small business owners don’t know what they need to know about human resources, and also they don’t know how to integrate it into their business plan the way they do with marketing, finance, sales, and other functions.

Using HR to further your Business Goals

Using HR to further your business goals and aspirations, and second, keeping your firm legally compliant, out of trouble, and out-of-court. The key to having effective human resources function your firm’s understand it is an essential component – a foundational component – of your business plan. You can visualize it as two distinct but very related sides of the same coin. The first side is that human resources helps you to manage the relationship of your employees to the firm. On the other side, human resources should effectively manage the relationship of your firm to a host of federal and state agencies, regulations, and laws.

The first focus is internal, the second focus is external. But both relate to people: their rights, their responsibilities, and their behavior. I would note that while human resources is inherently burdened with more rules and regulations and paperwork, it is not just compliance function, any more than marketing is just making up slogans or accounting is just making the numbers add up.

Let’s be more specific, then, about the traditional areas that human resources functions take care of, sorted into the internal and the external sides of our coin.

Internal – Employee-to-Firm Relationships

  • recruiting and interviewing
  • hiring
  • compensation for the classification
  • position descriptions
  • training
  • benefit programs
  • payroll
  • workers’ compensation
  • performance evaluation and feedback
  • disciplinary actions
  • termination and unemployment
  • policy and procedure
  • workforce planning
  • regulations
  • administrative rulemaking
  • court decisions

Each area has multiple subsets and concerns. I would also note that each of these areas has dozens and dozens of laws, rules and regulations on both the state (or states) federal level the HR must be in compliance with in order to stay out of trouble. And there are always ongoing court decisions, again at the state level and at the federal level, that may impact and change each of these compliance areas.

In summary, once your company is yourself plus one employee you need to know what you need to know about human resources in order to be legally compliant and stay out of trouble.