Managing the HR function in a small business without an HR person

  • Sara Strohschein

    Sara Strohschein

Posted12/14/2018 1:00 AM

In a small business, determining who is responsible for managing the many human resource functions: hiring, termination, performance management, personnel record keeping, benefit administration, legal compliance, overall employee relations, and more, can be challenging. Organizations that don't place enough importance on these functions are losing out on productivity and efficiency, and may be putting themselves at risk of noncompliance and potential lawsuits.

In smaller organizations where a full-time HR person is not feasible, how can the function be managed?


In any organization, at least one person should be designated as the "HR contact." While certain HR duties may be shared among several individuals, it is good business practice to identify at least one individual who is responsible for keeping abreast of changes in employment laws and administrative practices, and monitoring to ensure policies, practices, and forms are relevant and up to date. In smaller organizations, this overseer is often the controller or office manager. They will typically have a thorough understanding of the business and its culture, be involved with the payroll function and/or have a bird's-eye view of the happenings in the organization. This individual should be trustworthy, credible, competent, and forward-thinking. It is essential that the HR contact take the role seriously and consider it a vital part of their job, not simply an add-on of responsibilities.

Consider these proactive steps when managing the HR function without a designated HR department:

• Clearly define the roles and responsibilities of anyone involved in any HR-related tasks. Communicate these roles and responsibilities to the entire organization so employees and management are aware of the designated "go to" person(s) for their specific needs (e.g., benefits questions, personnel record keeping, payroll, on-the-job injuries, ETC.).

• Assess the training needs of anyone performing HR-related tasks and educate as needed. While it may not be feasible to have an expert in all facets of HR, at a minimum, classes that provide an overview of the different HR functions can build a foundation for what may be involved in running an "HR department."

• Develop written policies and/or standard operating procedures to document important tasks. Having written procedures and others cross-trained in functions is critical, particularly in smaller organizations where the tasks are normally completed by one person.

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• Subscribe to a variety of HR-related newsletters, publications, and e-alerts to keep abreast of changes in the legal landscape and glean information about HR best practices. Attend legal updates and conferences.

• Participate in HR roundtables or other networking groups to share information, ideas, issues, and to benchmark best practices.

Most importantly, surround yourself with outside experts who can assist with complex issues. Resources that can provide help include HR consultants, tax accountants, payroll providers, insurance brokers, third-party benefit administrators, employee assistance plan providers, etc. Periodically conduct audits to ensure your organization is on track, remains compliant, and runs at optimal efficiency. No matter the size of your organization, HR is a critical component for success.

• Sara Strohschein is an HR Director at MRA -The Management Association. Visit or follow MRA on LinkedIn:, Facebook:, or Twitter: @MRA_HR_Pros.

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