As small businesses grow and hire more employees, the need for Human Resources becomes apparent. But it can be hard to know exactly what kind of service you actually need. It’s not uncommon for small businesses to pay way too much for HR packages they can’t actually use.
What HR Payroll Services Do You Really Need?
A lot of responsibilities fall under the umbrella of HR. HR is often tasked with recruiting, hiring, and training new employees. But HR responsibilities can extend much further into internal processes, from maintaining a positive work environment and culture to understanding and managing labor law compliance.
But for small businesses, HR is never a one-size-fits-all discussion - and it shouldn’t be.
As your company grows, your needs will change. And when it comes to payroll and HR, it’s important to scale what you pay for in tandem with your company’s actual needs.
Small Businesses With 1-5 Employees
If your business is this small, your team may be lean enough not to need HR help at all. A small business payroll service may be all the help you need to manage your company sufficiently.
Some companies purchase HR services simply because it's bundled with a payroll service. However, in many cases, especially for businesses this small that have fewer employees to manage, they end up overpaying for HR services they can’t really use. If your company has less than five employees, a full-suite HR solution may be an unnecessary expense.
Small Businesses With Less Than 50 Employees
When companies grow to more than five employees, the need for HR help becomes more apparent. Recruiting, training, and managing fifteen employees is much more difficult than four or five. Company policies and procedures that were easy to track and manage with a few employees is now a full-time job all its own. This includes:
- Maintaining an updated employee handbook
- Achieving and maintaining regulatory compliance
- Keeping up with mandatory trainings (required in some states and industries)
- Making sure employee time cards are processed and recorded properly
- Documenting employee terminations
- Dealing with employee complaints and other legal issues
In most cases, a company with less than fifty employees will eventually have a full-time HR employee in-house. But this small HR department typically needs some sort of help with compliance.
Still, paying for large HR provider’s services could be overpaying for services you don’t really need. There are other options for companies this size.
We provide our clients with an HR resource package that helps their in-house team be successful at a much smaller price tag. Our HR Resource Center helps companies to:
- Create and maintain their employee handbook
- Coordinate and track mandatory employee trainings, including sexual harassment prevention training
- Receive unlimited confidential advice from ERISA and employment lawyers
- Access updated federal and state-specific resources and labor law posters
Companies With More Than 50 Employees
As companies grow to fifty or more employees, the need for robust HR services becomes a must-have. These companies are usually better fits for larger, “big box” payroll providers that include HR expertise in their bundle of services. Some companies outsource to an HR manager or even begin to build their in-house HR department.
Another option for companies this size is to work with a PEO, or professional employer organization. Employers can outsource their human resources to a qualified PEO, handing them the responsibility of employee benefits, workers' comp, employment taxes, and the administration of payroll.
Getting the Right Kind of HR Service
To summarize, if you have less than five employees, you probably don’t need to pay for HR services. As your company grows, you will need to facilitate that growth by adding some HR help, but you probably don’t need a full-time internal or outsourced HR payroll service. As your company grows beyond fifty employees, you will gradually invest more and more into HR solutions.
Whatever level of service you need right now, your needs will change as your company grows.
At ConnectPay, we specialize in payroll services for small businesses. However, we do offer our customers an HR package that is both affordable and convenient for small businesses. It’s a great fit for small businesses that still don’t need a full-time in-house or outsourced person handling HR.
If you want more information about this package, you can find it here. Or, you can schedule a meeting with one of our payroll specialists to discuss your payroll or HR needs.
