“Why would I need HR support? I only have three employees!” This sentiment is common—and if you’re a business owner who feels this way, you’re not alone. Small business owners often believe that having a smaller headcount protects them from the significant HR issues that “other businesses” face. However, your business needs an HR strategy even if you have just one employee.
HR support is essential for businesses of all sizes to ensure compliance with benefits, hiring best practices, policy creation, and more. It helps streamline operations, ensure legal compliance, and foster a positive workplace culture. With effective HR practices in place, small businesses can enhance employee retention, lower turnover costs, and cultivate a more productive work environment. Without it, businesses expose themselves to unnecessary and costly risks that could be minimized with appropriate support from an HR professional.
In this blog, we provide valuable insights into why HR support is vital for small businesses and resources for business owners to utilize.
You might be unsure about the value of HR support, especially when you’re trying to keep costs low as a small business owner. However, the real question is—can you afford to wait until a problem arises to realize the importance of proactive HR support? Just because you haven’t faced HR-related issues yet doesn’t mean they won’t occur, and being unprepared can cost your business significantly.
According to our in-house HR consultant, businesses with a reactive approach to HR, addressing issues only as they arise, spend 2.2 times more than those that invest in proactive strategies. Early, proactive HR support can save money and prevent issues from escalating into costly problems.
For example, without an HR handbook or clear policies, even minor workplace issues can quickly snowball into legal disputes, high turnover, and employee dissatisfaction. Clear, written policies ensure that expectations are communicated effectively, workplace issues are resolved fairly, and your business is protected from unnecessary risks and additional costs. By prioritizing HR now, companies can save money, strengthen their workforce, and focus on long-term success.
For the average small business owner, effectively managing the complexities of HR compliance is more than they can handle. Regulations differ by state, and staying current with the latest requirements can be challenging. From wage and hour laws to anti-discrimination policies, tax obligations, and workplace safety standards, ensuring HR compliance is vital to avoid fines, legal issues, and damage to reputation.
One example is retirement requirements. Many states require employers to provide retirement savings options, and various rules exist across state borders. In Maine, where our business is based, employers with five or more employees must offer a retirement plan under the Maine Retirement Savings Program. State-specific mandates like these are becoming more common, and staying informed about your state’s requirements is critical. A proactive HR strategy ensures you’re up-to-date on important employment laws, reducing the likelihood of costly mistakes that could jeopardize your business.
HR support in a small business extends beyond compliance—it is vital in fostering a workplace culture where employees feel valued, heard, and supported. When companies invest in strategic hiring, onboarding, performance management, and conflict resolution, they reduce turnover, enhance morale, and cultivate an environment where employees want to stay.
A strong HR foundation directly impacts retention and engagement. In fact, companies with effective onboarding programs improve employee retention by 82% and productivity by over 70%. Employees who feel their concerns are taken seriously and trust that their workplace is well-managed are more engaged, productive, and loyal, leading to a stronger, more stable, and more positive workforce.
You may be sold on implementing HR support services in your small business, but your final hesitation may be the cost. Due to the costs and practicality, having a full-time, in-house HR professional is not feasible for many small businesses. This is where fractional HR services could be the perfect solution.
Fractional HR support is flexible and scalable to your business’s needs, and provides the support you need without the overhead of a full-time hire. These trusted partners help your business manage essential HR functions while ensuring compliance. Some of the most valuable areas of support include:
By investing in fractional HR services, your business can enjoy the benefits of strategic HR support, risk mitigation, and improved employee management—while maintaining flexibility and cost control. Whether you need occasional HR guidance or ongoing support, fractional HR can be the key to building a strong, compliant, and thriving workplace.
For small business owners interested in more information about the benefits of HR support, check out our “HR For Small Business” video on our YouTube channel. In it, we sit down with Fractional Human Resources Officer Michelle LeBlanc of Evolved HRX to discuss common questions from small business owners.
We also have a video with Kevin Delaney from Retirement Solutions Group that provides a small business owner’s guide to retirement planning for their employees.
HR isn’t just a back-office function—it’s essential to running a successful business. Proactive HR support can save time, money, and headaches while reinforcing your company’s foundation by ensuring compliance and nurturing a positive work culture.
If your small business needs effective HR support, our team is here to help with services that simplify your HR. Contact us at grow@cultivateconsulting.co to learn how we can help.
Christine Gervais
Christine Gervais is a licensed CPA, using her skills to help businesses grow and achieve their fullest potential. Christine has a Master’s degree in accounting from Southern New Hampshire University in addition to holding her CPA license for over a decade. Notably, Christine is a nationally recognized speaker providing education to other CPAs on how to best serve clients as well as instruction on a wide variety of topics for business owners on how to maximize success. Christine prides herself on the value she can bring to clients with her extensive tax knowledge and provides strategic, forward-thinking financial strategies to help clients grow. When not behind her desk, you can find Christine spending quality time with her daughter and stepson or tending to the family’s excessively loved farm animals.
