1 in 5 Small Businesses Lack HR Confidence

A staggering one in five small businesses lack confidence in various aspects of human resources. These were the findings from the latest Paychex Small Business Survey.  The survey polled 250 principals of businesses in the US with 2 to 500 employees.

Small Businesses Lack HR Confidence

According to the survey, 21 percent of small business owners lack confidence in their company’s ability to remain HR compliant.

The research shows 38 percent of modern small businesses lack confidence with onboarding. Onboarding is a principle function of HR, involving getting new employees adjusted to their new jobs quickly and efficiently.

In the official release announcing the release of the survey, Jackie Hoyt, HR consultant at Paychex, spoke of the importance of onboarding.

“New hire onboarding is one of the first and most important HR processes for an employer and employee. From Form I-9 to the W-4 withholding form to state withholding form(s) to direct deposit, think about all the documents a new hire needs to complete before even getting their first paycheck,” said Hoyt.

Two other areas the Paychex survey reveals small businesses lack HR confidence is with the development of an employee handbook and with the ability of HR to do proper background checks. The survey shows 36 percent of small businesses don’t have sufficient confidence when it comes to the company handbook.

Meanwhile, 26 percent of the survey’s respondents admitted they lack confidence with their HR departments’ abilities to run standard employee background checks.

Lack of Automation

Another key finding from the survey was that a lack of automation could be influencing the low levels of confidence small businesses have when it comes to matters involving HR. The survey showed only 30 percent of small businesses use technology and automate processes involving onboarding and other vital HR functions.

Rather than tracking time and attendance by automation, 38 percent of small businesses still monitor time and attendance manually.

HR Compliance

Compliance is another cause of concern among small businesses, the survey says. In fact, 42 percent of small businesses lack confidence in their HR department’s ability to comply with youth employment standards .

In the release, Dorene Crimi Lerner, an HR consultant with Paychex, suggested one reason small businesses may fall short on HR is the mistaken belief  small businesses with 10 or fewer employees have no need to worry about HR compliance.

“The truth is, HR become a reality when you add your first employee,” Lerner said.

Image: Paychex

This article, "1 in 5 Small Businesses Lack HR Confidence" was first published on Small Business Trends