Being Your Own HR Department is a Big Problem

Being You Own HR Department

As your company grows, you are suddenly faced with issues you have never experienced previously. Among these, one of the most difficult to navigate is HR needs. While it may seem doable at first, many small business owners quickly realize that being your own HR department is no simple task.

Before you had any employees, things were much simpler. The only obligations you had as a business owner were to yourself and any companies you partnered with. These obligations require not only a mental adjustment on your part as a leader, but also necessitate a great deal of new HR tasks.

This extra work can be quite harmful to the success of your company. This is both through mistakes made in completing them, and how much of your time it takes up. Wouldn’t you rather spend that time actually focusing on your company’s growth and operations?

Here are some of the biggest problems you could run into being your own HR department.

Paperwork: Constantly Drowning in Unfamiliar Waters

The sheer amount of additional paperwork that comes along with having employees can be a truly staggering obstacle to overcome. Even from the very beginning, there’s the standard new hire paperwork needed for onboarding a new employee, and that only scratches the surface.

You will also have to routinely deal with the paperwork that goes along with payroll. This can be a time consuming process, and even small errors can delay this process greatly. When it comes to keeping your employees happy and motivated, the last thing you want to do is make mistakes that affect their income.

Even worse than these routine sources of paperwork, there is the incredibly complex world of employee benefits and the intimidating amount of forms that need to be filed for them. Not only is this process time-consuming, but also quite confusing. Making the best choices about the benefits you offer to your employees and making sure everything filled out and filed correctly is hardly the best use of your time when you could be focusing on improving your company instead.

Compliance: Am I Good? 

Even if you try to do absolutely everything right for your employees, it can be incredibly easy to simply miss something important. When this happens, you can easily find yourself in hot water with either the state or federal government for not being compliant with their rules and regulations.

With how complex and ever-changing these laws are, you simply do not have sufficient time to devote yourself to knowing everything you need to while also running your business. If you are trying to be your own HR department, this means you likely face one of two unfavorable situations.

The first is that you have a good chance of missing an important compliance issue because you couldn’t pay enough attention while you focused on leading your company. The other is that you could start feeling as though you no longer have adequate time to focus on the actual work your company is doing because you are so bogged down in administrative details.

Neither of these options are exactly ideal for anyone running a small business, and are very real risks you take when attempting to be your own HR department.

Harassment: Personally Dealing With Issues You Hoped Would Never Come Up

One of the most difficult situations you can find yourself in when you handle you try to be your own HR department is when instances of harassment occur in the workplace. While you obviously should hope that these situations would never happen within your company, the reality is that they still might.

When this happens, there are many reasons that it is for the best that there be a degree of separation between you as the business owner and the employees involved. Having proper HR professionals working to resolve the situation allows you to remain focused on the business itself while remaining an effective leader. This also protects you from any potential mistakes you could make in resolving the issue yourself.

By having qualified people handling HR issues instead of being your own HR department, you also open up better opportunities to handle these situations in ways you may not have thought about, such as Alternative Dispute Resolution. Utilizing options like ADR could save both you and your employees a great deal of frustration and resolve issues well before they ever make it to a courtroom.

Time Allocation: Giving Up Hours You Already Didn’t Have

Beyond all the specific headaches that come with being your own HR department, it has an even larger impact on the time you have to spend on your small business.

Every HR-related task that you do yourself takes up time that you could otherwise spend on further developing your business. Even the simplest of these tasks will quickly add up, not to mention more complicated issues. Soon, you could very well find yourself spending more time on administrative details and paperwork than you do on actually running and further developing your business.

As a small business owner, you need every moment possible to focus on the myriad of responsibilities that are already on your plate. Between things like improving your product or service, selling, managing employees, and finding new ways to create and innovate, the last thing you need is for your attention and time to be any further divided.

After all, these are important not only because they push your company forward, but because they are what will really make your company money. Without bringing in money, it doesn’t seem likely that your company is going to last very long.

Being your own HR department simply means you have less time available for those parts of your small business that produce profit for you.


If you find yourself dealing with these issues from being your own HR department and want a better option, get in touch with us! We would love to discuss your problems and how our PEO services could be the right solution for you!


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