Why Your Small Business Needs an HR Director

It’s a given that larger businesses and companies, whether traditional or remote, need an HR director. But what about the HR needs of small remote businesses?

According to Jeb Smith, Founder of a business, marketing, and technology consultancy based in San Francisco, California, an HR director is essential for any business, regardless of size or remote status.

Paul Martinez, Founder of EcomSidekick, agrees: “Many small remote businesses tend to overlook the significance of having an HR director, assuming their size or remote setup exempts them from the need for dedicated human resources support.”

Jenny Palmer, Founder of Eggcellent Work, a platform dedicated to helping people succeed in their professional lives, explained that while she believes many small remote businesses don’t realize that they need an HR director, she has seen firsthand the big difference that having an HR director can make for a small business.

“I was working for a company that was growing quickly, and we decided to hire an HR director to help us deal with the challenges that come with growth,” Palmer said. “We were able to attract some really great candidates for the position, and now we have someone who has been instrumental in helping us navigate some sticky situations.”

As an example of how much an HR director helped in this context, Palmer shared that one of the company’s employees had been working there for three years when she told Palmer that she wanted to start taking time off during the day to take care of her kids.

“I wasn’t sure how best to handle this situation—I didn’t want to lose one of our best employees but also didn’t want her coming into work exhausted every day because she had stayed up late with her kids instead of getting them off to school in the morning. The HR director helped me negotiate with this employee so that everyone was happy and satisfied with the outcome.”

Below, we’ve outlined five reasons why your small remote business may need an HR director.

1. Recruitment

Harold Morton, an HR Director at QATesting.io, explains that an HR director plays a crucial role in attracting and retaining top remote talent for smaller companies.

“They develop effective recruitment strategies and conduct thorough candidate evaluations,” Morton said. “Their expertise in talent management ensures that the right individuals are hired and integrated seamlessly into remote teams.”

2. Onboarding

Smith noted that an HR director can help to ensure that a small remote company provides guidance on best practices for hiring, onboarding, and managing remote employees. This might include creating employment contracts, ensuring that employees adhere to remote work policies, and managing payroll and benefits.

3. Compliance

An HR director helps to ensure that the company is compliant with all relevant laws and regulations to mitigate potential risks, Smith told Remote.co.

“This is especially important for small remote businesses, as they may not have the resources to hire a full-time HR team,” Smith said. This includes ensuring adherence to labor laws, such as those related to employee classification, compensation, benefits, and working hours. “They keep track of any changes in legislation and implement necessary adjustments to policies and procedures, minimizing the risk of legal issues and penalties,” Martinez said.

4. Employee Relations

An HR director of any size company also plays a significant role in handling employee relations, acting as a liaison between the firm’s management and the employees.

“They establish and enforce policies and procedures, ensuring that all remote workers understand their rights, responsibilities, and code of conduct,” Martinez explained. “The HR director also hands performance management, addressing any concerns, conflicts, or performance issues that may arise.”

5. Building Community

Other duties of an HR director in this context create a positive work culture for remote employees, helping to help to create a sense of community and collaboration while ensuring that remote employees feel connected to the company and their colleagues.

Morton emphasized that by supporting and fostering employee engagement initiatives, promoting work-life balance, and addressing any concerns or conflicts that may arise, an HR director can boost employee well-being and satisfaction, contributing to higher productivity and employee retention rates.

Strengthen Your Small Remote Business With an HR Director

While you may think an HR director isn’t needed for your smaller remote business, having someone at the helm of human resources can help with everything from employee recruitment and onboarding to compliance, employee relations, and community-building within your organization. All of these factors can potentially improve employee satisfaction while supporting the company’s bottom line.

To learn more about remote recruiting, hiring, management, and best practices, check out our Q&A with leading remote companies and virtual teams!