7 Critical Tasks Small Businesses and Startups Should Include in their Annual HR Plan

HR tasks planning involves a few steps. You can hire a firm that offers HR services for startups, or you can do it yourself. Should you choose to go the DIY route, the first step is to identify your business’s HR needs and goals. This could include things like hiring new employees, developing training programs, setting up employee benefits, creating a compensation plan, and overseeing employee performance. These needs and goals are typically identified through discussions with your partners, other stakeholders or senior management, surveys, or analysis of HR metrics.

The next step in HR tasks planning is to create a detailed plan for achieving the identified goals. This is where critical HR tasks come in, discussed below. It is essential to involve all relevant stakeholders in this process to ensure that everyone is on the same page and that the plan is realistic and achievable.

• Task #1. Identify if there is a need for open positions within your business
• Task #2 Recruitment and onboarding of new employees
• Task #3. Setting up and/or managing employee benefits and compensation plans
• Task #4. Creating and maintaining employee records
• Task #5. Ensuring compliance with legal and regulatory requirements
• Task #6. Developing and implementing diversity and inclusion initiatives
• Task #7. Training and performance management planning

Once the plan has been created, your HR consultant or HR Manager needs to execute it. This involves tracking progress against the plan, adjusting as needed, and communicating progress to relevant stakeholders. The HR professional must also ensure that the plan is aligned with the business's overall strategy and goals.

Here are the seven critical HR tasks that should be included in an annual HR planning process:

Task #1. Identify if there is a need for open positions within your business

There are a few possible ways to figure out whether your business needs additional help:

• Business growth. Are clients coming knocking at your door at an increased rate? Can you sustain supporting the volume of your sales? Do you anticipate your business growing? As a company grows, there may be an increased demand for more employees to support the expansion. The need for open positions may be identified when workload or demand for your services/products increase, and current employees cannot keep up with the demand.

• Turnover When an employee leaves the company, whether through resignation, retirement or termination, it creates a vacancy that needs to be filled. You should always monitor turnover rates to determine if there is a need to hire new employees. Try to identify who is retiring this year. What was your turnover rate in the previous year? Apply the rate to the upcoming year to ballpark the number of your terminations and resignations.

• New projects. If your company is planning on taking on new projects, there may be a need for additional employees to work on the project. This could be a temporary or permanent need, depending on the project scope. Alternatively, you can hire a consultant on a temporary basis if your projects are short-lived.

• Restructuring. Are you, as a business owner, or is your company, as a whole, planning on restructuring? It may need to create new roles or eliminate existing ones. A restructuring could come as a consequence to changes in the company's strategy, organizational structure, or budget.

• Employee feedback. Employee feedback can also provide valuable information regarding the need for additional employees. You should monitor workload and stress levels of your employees and get feedback on how they feel about their workloads.

By knowing your business plan and where your company is headed this year, you can identify when and if there is a need for an open position and plan accordingly.

Task #2 Recruitment and onboarding of new employees

Recruiting and onboarding new employees are critical steps in building a talented and diverse workforce that can help your company achieve its goals. It involves attracting and identifying potential candidates for open positions within the organization. The recruitment process typically has several steps, including development of job descriptions and defining the requirements for the position, posting job openings on relevant job boards and other recruitment channels, screening resumes and cover letters to identify qualified candidates, conducting virtual or in-person interviews to assess a candidate's skills, qualifications, and cultural fit, selecting the most suitable candidate and extending a job offer.

Once you have identified and hired a new employee, the next step is onboarding. Onboarding is the process of integrating a new employee into the organization and preparing them to succeed in their new role. The onboarding process typically includes:

1. Completing necessary paperwork, such as tax forms and benefits enrollment
2. Providing an overview of the organization's culture, values, and mission
3. Introducing the new employee to key stakeholders, such as their manager and team members
4. Providing training and orientation on job duties and responsibilities
5. Providing information on policies, procedures, and benefits.

An intermediate step between recruitment and onboarding could be running a background check and a drug test to ensure safe and thriving work environment.

Task #3. Setting up and/or managing employee benefits and compensation plans

A well-designed compensation and benefits plan can help you attract and retain top talent you so desperately need, motivate your employees to perform at their best, and support the organization's overall business objectives. Here are a few steps that could help you visualize what your compensation and benefits plan should look like.

1. Define your compensation philosophy. Your compensation philosophy should outline your organization's approach to employee compensation, including how you define "fair pay" and how you will differentiate pay for performance. This philosophy should take a close look at your company’s market competitiveness – how competitive are you with the other companies within your industry? Will you be leading or lagging comparing to your competitors when it comes to compensation? Will you try to match the market pay?

2. Develop a compensation structure.A compensation structure should outline the pay range for each position within your organization, taking into account your employee’s experience, education, and performance. It should be based on market data and aligned with your organization's compensation philosophy.

3. Design employee benefits plans. Employee benefits plans can include a myriad of traditional benefits (health insurance, retirement plans, paid time off, etc.), as well as unique perks (gym membership reimbursements, pet insurance, on-site daycare, etc.). Your benefits plans should be aligned with your organization's compensation philosophy and goals, and should be competitive with your industry standards.

4. Communicate compensation and benefits plans to employees. Employees feel valued and supported when there is a clear and transparent manner, in which the compensation and benefits plans are communicated. Make sure your plans support internal equity.
5. Monitor and adjust compensation and benefits plans when necessary and on a regular basis.This needs to be done to ensure that the compensation and benefits plans remain aligned with your business's goals and industry standards.Depending on your findings, you may want to adjust your pay ranges, add or remove some benefits, or make other changes to the plans as needed.

Setting up and managing employee compensation and benefits plans is an ongoing process that requires a bit of an effort, but rest assured, if done right, these plans can help you attract and retain top talent, foster a positive workplace culture, and support your overall business objectives.

Task #4. Creating and maintaining employee records

Creating and maintaining employee records is also a critical part of the annual human resources planning process. It helps businesses keep track of key information about their employees, such as their personal details, job history, performance evaluations, and training records.

To generate employee records, HR consultants or HR managers typically gather information from new hires during the onboarding process, including their name, contact information, social security number, and employment eligibility. They may also collect information about their educational background, previous work experience, and job preferences.

Once an employee's record is created, it should be maintained and kept up-to-date. This includes real-time updating personal information, such as changes in address or emergency contact details, as well as changes in job title or responsibilities. Employee records should also include any disciplinary actions or performance evaluations. A good housekeeping practice is to audit the employee records at least twice a year to ensure that important changes have been updated.

Employee records typically include a variety of information related to the employee and their employment. The specific information included may vary depending on the organization and the nature of the employee's job, but some common items that are typically included in employee records are:

• Personal Information. It typically includes the employee's full name, address, phone number, email address, social security number, date of birth, and emergency contact information.

• Employment Information. It can include the employee's job title, job description, start date, work schedule, employment eligibility verification, and employment status (full-time, part-time, temporary, or permanent).

• Pay and Benefits Information. This is usually the information about the employee's salary, pay rate, pay period, overtime pay, bonuses, and benefits such as health insurance, retirement plans, and vacation time.

• Performance Information. This includes performance evaluations, disciplinary actions, promotions, demotions, and any other notable events related to the employee's job performance.

• Training and Development Information. This could be any training programs the employee has completed, as well as any certifications or licenses they hold that are relevant to their job.

• Leave Information. Such information may be about the employee's use of sick leave, vacation time, personal days, and any other types of leave they are entitled to.

• Exit Information. It may be related to the employee's resignation or termination, including the reason for the departure and any relevant documentation.

It is important to note that employee records should be maintained in accordance with applicable laws and regulations related to data privacy and confidentiality. Additionally, businesses should have clear policies in place regarding who has access to employee records and how they are used.

Task #5. Ensuring compliance with legal and regulatory requirements

This process involves reviewing and updating your business’s HR policies and procedures to ensure they comply with all applicable laws and regulations. Some key steps that can be taken to ensure compliance with legal and regulatory requirements as part of the annual HR planning process are the following:

• Conduct a review of current HR policies and procedures. They need to be up-to-date and comply with all applicable laws and regulations. This review should include an assessment of any changes to laws or regulations in the states and localities your business operates in and on the federal level that may impact HR practices.

• Identify legal and regulatory requirements. If you are a new business, you should identify the relevant laws and regulations that could impact your HR practices, such as equal employment opportunity laws, wage and hour laws, and immigration laws. Once these requirements are identified, they should be integrated into the HR planning process and revisited on an annual basis to ensure continuous compliance.

• Develop and implement HR policies and procedures. This training should be provided to all employees, including managers and supervisors upon rolling out your new policies and on an annual basis.

• Monitor compliance. You or your hr manager should monitor compliance with HR policies and procedures to ensure they are being followed. This may involve conducting regular audits of HR practices to identify any areas where compliance may be lacking.

Following these steps may help to minimize legal risks and ensure that your HR practices are aligned with best practices and legal requirements. Alternatively, you can hire an HR consulting firm to do the audit of your compliance for you.

Task #6. Developing and implementing diversity and inclusion initiatives

Diversifying your workforce leads to so many wonderful benefits for your business. It brings together people with different backgrounds, experiences, and perspectives, which can inspire creative and innovative solutions to problems. Diversity can help to reduce the risk of groupthink, as different perspectives can lead to more thoughtful and well-rounded decisions. On top of this, people and companies like doing business with diversified organizations.

Research shows that businesses run by culturally diverse leadership teams are more likely to develop innovative products than those with homogenous leadership. Employees are more likely to feel engaged and committed to their work when they feel that their contributions are valued and that they are part of an inclusive workplace culture.

In order to develop and implement diversity and inclusion in their workplaces, small businesses need to start with assessing their current diversity and inclusion practices and set the goals of what they want to achieve, including increasing the diversity of your workforce, creating a more inclusive culture, and ensuring that all employees feel valued and respected. A firm plan should be set in place for how these goals are supposed to be achieved. Your plan might consist of things like revising your job descriptions to be more inclusive, implementing training programs for employees, and creating employee resource groups.

Once the plan has been finalized, you should communicate it to all of your employees and start implementing it. Tracking employee demographics, conducting surveys to gauge employee satisfaction, and monitoring the success of your training programs can all help you asses if your plan is working. Make adjustments to it as needed.

Task #7. Training and performance management planning

Training and performance management are essential for ensuring that your employees have the skills and knowledge they need to perform their job duties effectively, as well as for evaluating their performance and providing feedback to help them improve.

When developing a training and performance management plan for your small business, start by identifying the specific skills and knowledge that are necessary for each job in your organization. This may include technical skills, such as operating certain software programs or equipment, as well as soft skills, such as communication and customer service.

Once you have identified the necessary skills and knowledge, create training materials to teach them to your employees. Next, deliver the training to your employees, which may involve scheduling time for them to complete online courses or attend in-person training sessions. Make sure to provide clear instructions and guidance throughout the training process.

After your employees have completed the training, evaluate their performance on a regular basis, like setting performance goals and tracking progress toward those goals, as well as providing regular feedback and coaching to help employees improve.

Ultimately, HR tasks planning is a critical process for ensuring that your business runs efficiently and effectively, at least on the HR side of things. By following the above critical tasks, businesses and organizations can ensure that their people are well-managed and that the HR functions are aligned with the businesses overall strategies and goals.