Don’t DIY: Busi­ness own­ers del­e­gat­ing HR

The Denver Post - - BUSINESS - By Joyce M. Rosen­berg

As small busi­nesses keep hir­ing, many own­ers dis­cover that be­ing a do-it-your­self hu­man re­sources man­ager is the wrong job for them.

Becky Robin­son han­dled hir­ing, pay­roll and other HR needs when she started her mar­ket­ing com­pany, Weav­ing In­flu­ence, five years ago. But dur­ing pe­ri­ods when she fo­cused on HR, the com­pany’s rev­enue took a dip. She re­al­ized she needed to keep her fo­cus and turn those tasks over to a di­rec­tor of op­er­a­tions and an HR con­sul­tant.

“The only way for us to grow is for me to del­e­gate and not get bogged down in the de­tails of HR,” says Robin­son, whose four-em­ployee com­pany is based in Lam­bertville, Mich.

Pay­roll provider ADP said Wed­nes­day the fact that small busi­nesses added 50,000 jobs last month may mean that own­ers are tak­ing on more hu­man re­sources tasks while they’re also try­ing to get new busi­ness and de­velop prod­ucts and ser­vices.

A re­cent study re­leased by ADP shows that HR at 70 per­cent of small busi­nesses is han­dled as a side job by the owner or a staffer with other pri­mary re­spon­si­bil­i­ties. In many com­pa­nies, the peo­ple do­ing it don’t have any HR train­ing, says Brian Michaud, a se­nior vice pres­i­dent at ADP.

Hu­man re­sources tasks, which can in­clude com­ply­ing with gov­ern­ment la­bor laws and reg­u­la­tions, han­dling dis­ci­plinary prob­lems and ad­min­is­ter­ing em­ployee benefits, are no dif­fer­ent from chores like keep­ing the books that many own­ers could hand off but don’t.

Some­times it’s be­cause they want to keep costs down, so if they have just a hand­ful of em­ploy­ees they don’t want to hire an in-house HR man­ager or con­tract with a com­pany that sup­plies HR ser­vices. Many en­trepreneurs also find it hard to del­e­gate.

“They hate to let any­thing get out of their con­trol,” says Gene Marks, owner of The Marks Group, a small-busi­ness con­sult­ing firm based in Bala Cyn­wyd, Pa. Own­ers are par­tic­u­larly un­will­ing to share in­for­ma­tion about their com­pa­nies with any­one else, he says.

Robin­son had han­dled re­cruit­ing for her com­pany, and hired from re­fer­rals by peo­ple she knew. But as her busi­ness grew and she needed ex­pe­ri­enced staffers with spe­cific skills, she re­al­ized she needed help from some­one more knowl­edge­able about re­cruit­ing and with more con­tacts to find job can­di­dates. So her HR con­sul­tant now finds prospec­tive hires and does ini­tial screenings and in­ter­views.

At staffing com­pany Omega Tal­ent, “we cob­bled to­gether our HR du­ties among three or four peo­ple on staff,” says owner Craig Sher­man.

“It wasn’t co­he­sive or ef­fec­tive, that’s for sure,” says Sher­man, who has a staff of 12 as well as 45 em­ploy­ees whom the com­pany places at client busi­nesses.

Omega Tal­ent, which is based in Clin­ton Town­ship, Mich., ran into oc­ca­sional prob­lems with the patched-to­gether ap­proach. Some­times mis­takes were made or Sher­man and his staff were caught by sur­prise af­ter em­ploy­ment laws or reg­u­la­tions changed. Ear­lier this year, Sher­man turned the tasks over to a com­pany that pro­vides HR ser­vices.

“We are ex­tremely happy with our de­ci­sion,” he says.

Nathan Miller han­dles his HR needs him­self, but he also keeps an eye on how much that’s tak­ing him away from de­vel­op­ing his busi­ness, Ren­tec Di­rect, which sells real es­tate prop­erty man­age­ment soft­ware. He’s found that me­di­at­ing oc­ca­sional dis­agree­ments among his 10 full-time em­ploy­ees can be a dis­trac­tion.

“I should prob­a­bly be set­ting up a new part­ner­ship or vet­ting a new tool in­stead,” says Miller, whose com­pany is based in Grants Pass, Ore.

Miller says he’ll con­sider hir­ing some help for HR if those tasks take up more than four hours of his time a month.

He’s also aware that the ex­pan­sion plans he has — he hopes to dou­ble his staff within a few years — will likely force him to re­lin- quish HR re­spon­si­bil­i­ties.

Many own­ers re­al­ize they need help when faced with the mul­ti­plic­ity of em­ploy­ment laws and reg­u­la­tions at the fed­eral, state and lo­cal level. Em­ploy­ers must com­ply with laws re­lated to pay, work­ing hours and con­di­tions, benefits, dis­abil­ity, dis­crim­i­na­tion and ha­rass­ment. In a grow­ing num­ber of states and mu­nic­i­pal­i­ties, work­ers must be al­lowed to ac­crue paid sick leave. If they’re gov­ern­ment con­trac­tors, there are ad­di­tional re­quire­ments, such as a higher min­i­mum wage than the gen­eral fed­eral min­i­mum of $7.25 an hour.

Laws and reg­u­la­tions that fre­quently change raises the pos­si­bil­ity that some com­pa­nies might in­ad­ver­tently be in vi­o­la­tion of them. That’s why Guil­ford Can­tave hired an HR provider.

“I was look­ing to do ev­ery­thing right from the first op­por­tu­nity,” says Can­tave, pres­i­dent of Fer­mitron, an elec­tri­cal en­gi­neer­ing and man­u­fac­tur­ing firm based in Or­lando, Fla. “It wasn’t some­thing that I wanted to ex­per­i­ment with or have half the truth about.”

Many own­ers are forced to get HR help when some­thing goes wrong, Marks says, such as an owner miss­ing a dead­line for pay­ing pay­roll taxes or fil­ing re­quired doc­u­ments with the gov­ern­ment.

“You start re­al­iz­ing how much you’re in over your head,” he says.

A bad hire con­vinced Amy Bax­ter to out­source part of her hir­ing process. Bax­ter, owner of Vi­bra­cool, the maker of a med­i­cal de­vice aimed at re­duc­ing pain, did her own re­cruit­ing and hired some­one who said she could cre­ate mar­ket­ing ma­te­ri­als. She couldn’t.

“If I had known more about the world of HR be­fore, it would have saved a lot of time and drama,” says Bax­ter, whose com­pany is based in At­lanta.

She’s still han­dling other HR tasks her­self. But Bax­ter also re­al­izes that any­thing she can out­source, she should.

“I should spend my time mak­ing con­nec­tions and de­vel­op­ing prod­ucts,” she says.

Car­los Oso­rio, The As­so­ci­ated Press

Becky Robin­son han­dled pay­roll, hir­ing and other hu­man re­sources needs when she started her Lam­bertville, Mich., mar­ket­ing com­pany, Weav­ing In­flu­ence, five years ago. But dur­ing pe­ri­ods when she fo­cused on HR, the com­pany's rev­enue took a dip so she turned those tasks over to a di­rec­tor of op­er­a­tions and an HR con­sul­tant.

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