The Ultimate Guide to HR Process Improvement for Small Businesses

Tired of manually handling annual leave requests? Forgot to schedule the annual performance reviews? Worried that your onboarding flow might be missing something important? This is the guide for you.

In a small business, it’s normal for HR to be handled by one person that isn’t a HR professional. And all the information and action steps live inside their head, a collection of spreadsheets, or their email inbox. On a good day, this might work just fine. But it leaves room for human error, which can be costly.

We don’t want you worrying about compliance and how to get things done any more. It’s time to approach HR processes in a new, more organised way. No more spreadsheets and sticky notes — we’re moving onwards and upwards to clear workflows, automation, and systems that give you peace of mind.

In this guide, we’re taking a closer look at HR processes, why they’re necessary, and the steps you can take to improve the HR workflows within your small business.

What are HR processes?

HR processes are the workflows that you follow to effectively and efficiently manage HR tasks. Instead of remembering a list of steps and potentially missing something out, a clear HR process allows you to take the same actions every time — giving you structure and helping you stay compliant.

You’ll find processes, systems, and workflows within every area of human resources management (or HRM). Some examples include:

• Recruitment
• Employee onboarding and offboarding
• Employee performance management
• Annual leave management
• Employee benefits administration
• Training and development
• Workforce planning
• Employee relations
• Payroll
• Compliance

These core HR processes are often codified into HR policies to be shared with the entire organisation, or as standard operating procedures (SOPs) for the HR team. When the right people know what your process is and how to follow it, the entire system runs smoother for everyone.

Why your small business needs effective HR processes

It may seem like it’s possible to run a business without human resources processes and workflows, but this quickly becomes unmanageable. As your team grows, and as they encounter challenges and opportunities, you need to have a clear idea of the path forward.

It’s like Caitlin Price, Office Manager at Bloom & Wild says: “All the information was just kept inside someone’s head, or in a shared folder hidden away somewhere. That might work when a company is just a handful of people all working in the same room, but as a company grows that just becomes unsustainable.”

HR processes allow you to document a step-by-step route towards your goal in the most effective way. The result is a repeatable workflow that you can run manually or automate for even more impact.

Having a process doesn’t just make the tasks feel easier, though. Some of the other main benefits of introducing and improving your HR processes include:

• More productivity — with a clear process and the help of automation, you and your team can achieve more in the same amount of time. We were able to help Daye save 50 hours on HR admin per month by automating key HR workflows.
• Fewer errors — your team members can follow the exact process every time, reducing the opportunity for mistakes.
• Increased employee satisfaction — when a system works, it’s easier and more satisfying for everyone involved.
• Better employee experience — being transparent about your processes is part of creating an improved experience for all employees.
• Greater employee engagement — with self-service options and an easy-to-use company handbook, your employees have new and more effective ways to stay engaged with what’s happening.
• Increased employee retention — a small business with clear systems and processes tends to perform well in all areas, leading to increased loyalty from top talent.
• Easier compliance — with document systems and a clear workflow, it’s much simpler to stay compliant with HR laws.

Creating, documenting, and repeating your HR processes saves you time, improves the employee experience, and gives you peace of mind. If you don’t have repeatable workflows you can follow for your core HR functions, now’s the ideal time to work on them.

Key small business HR processes and improvement ideas

While there are lots of different HR processes, we recommend starting out by focusing on improving a handful. These are the HR processes we think small businesses get the most value out of documenting and improving in the beginning.

1. Onboarding and offboarding

Onboarding is a crucial time for you and your new hires. It’s an opportunity to introduce them to your company and culture, and a clear and easy-to-follow process is one of the best ways to make a good first impression. And while we don’t want to think about our best team members leaving, your offboarding process should be just as smooth too.

Some of the best ways to improve your onboarding and offboarding experiences include:

• Create a simple onboarding workflow — map out the process from start to finish, so you can repeat it every time you hire.
• Introduce self-service onboarding — invest in a HR platform that offers self-service onboarding, where new hires can manage their own details and documents.
• Use an onboarding process checklist — use our onboarding checklist template to help you check off tasks and increase transparency with your new hires.

This is a great first place to start as there are both tasks you’re required to complete for compliance reasons, and lots of space to be creative with the way you onboard new employees.

2. Employee records management

Effective record management is a must-have for any business, and this also applies to your employee data. Keeping everything secure and updated can feel overwhelming, but with the right workflows and software it’s easy to manage.

Here’s how to improve your approach to employee records management:

• Invest in HR software — move away from spreadsheets and emails and say hello to a central employee database.
• Enable self-service updates — make it possible for employees to update their own employee profiles when their contact details change, instead of having to ask you to do it.
• Conduct regular reviews — ensure that your database is kept up to date by planning a review every quarter or year, depending on what feels most relevant for you and your team.

You need to keep accurate employee records, so it makes sense for this to be a focal point for your small business HR process improvements.

3. Performance management

An effective performance management process allows you to check in with employees, discuss what’s working well and areas for improvement, and map out a proactive way forward. As a small business the way you enable growth and support development can outperform big corporations, so this is a great place to start if you want to attract and retain talented employees.

When you review your performance management processes, here’s how you can make improvements:

• Create a standardised performance review question template — by using the same questions you can cut down on preparation time and track changes and metrics over time.
• Automate your performance review process — set up recurring performance review cycles, so you never miss an opportunity for growth.
• Consider adding 360-degree reviews — improve the review process by getting feedback from not just direct line managers but colleagues too.

It’s easy to forget about performance management if you don’t have a defined process for it. Start now, and you can create a company environment where everyone’s striving towards working at their best.

4. Time-off management

Every business will handle time-off requests, whether you’re just starting out or your small team is growing. With no way to manage this, you’re constantly manually checking and approving dates. You need a simple and effective way to manage time-off requests so you can free up time to focus on other areas.

Here’s how to approach HR process improvement for time-off management:

• Make the process simple — introduce one simple way that employees can request time off, like a simple online form.
• Improve transparency — make it easy for employees to see how many days of annual leave they have left and what the deadline for using them is, so they can plan ahead.
• Automate your time-off management — automate time-off requests, approvals, and management and remove the need to manually manage leave.

We believe that an effective time-off management system saves a huge amount of time, which is a must-have for small businesses. With the right HR system in place, time-off management almost runs itself.

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How to improve your HR process workflows

Having a process is a great foundation, but it’s not until you review it that you realise there’s room for improvement. Here’s how to approach HR process improvement within your small business.

1. Audit your current HR processes

Start by mapping out your existing workflows and processes. Examine whether there are any missing, and make a note to create them. For existing processes, look at them closely. Do they work well? Are people always missing a step? Are the instructions unclear? Audit your processes to understand where they work and where they don’t, so you can build better workflows.

2. Set clear goals

Before you make improvements, know what your goal is. Do you want to save time? Reduce errors? Provide clearer instructions? Move to a new system? Once you’re clear on what your end goal is, it’s easier to see what needs to change to enable you to reach it.

3. Use HR automation to save time and avoid mistakes

The best way to improve your processes is to streamline your workflows with the help of a HR Information System (or HRIS). Instead of manually updating spreadsheets and checking folders on a shared drive, the right HR platform brings everything together in one place.

Look for tools that match your needs and goals. 

Find out more about how you can use software to automate workflows and improve the way you manage HR in our free guide to HR automation for small businesses.

4. Train your team members

While you can rewrite a process, introduce it, and hope that it works out, there’s a better approach — training your team members. When you have a new or updated workflow, gather everyone that’s usually involved with it for a training session.

Run through the process, identify and address skill gaps, and use this as an opportunity to make adjustments before it goes “live”. Even better, look for ways you can involve others from the start so they can develop the process with you like we do at Charlie.

5. Create or update your company handbook

Even if your team members have been trained on the new workflow, it’s still a good idea to provide them with clear instructions on how to run it. The best place to store all this information is within your company or employee handbook. Every time you add a new process, add it to your handbook and notify employees. That way, everyone knows where to find the information they need.

6. Review your processes and workflows regularly

Once you have a HR process, it might run smoothly for a while, but you might run into issues or experience challenges. Leaving your process as it is can cause major problems, which is why regularly reviewing them is a must. Create an audit and review timetable that works for you, and check in to make sure your workflows are still working for you. At Charlie this is something we do regularly, as we believe in the benefits of continuous improvement.

Streamline your HR processes and workflows with Charlie

Coming up with a list of HR processes and workflows can sound intimidating, but it’s really all about taking what you already do, documenting it, and looking for small improvements you can make over time.

HR process improvement for small businesses doesn’t have to be overwhelming, especially if you use it as an opportunity to invest in the right HR software — like Charlie. We designed Charlie with small businesses in mind, so our software has everything you need to simplify and streamline HR process management. Automate time-off management, introduce self-service onboarding, set recurring performance reviews, and more — all from one place.

Curious what streamlined HR management might look like? Take a free trial of Charlie today, explore the system, and see how creating and automating your workflows now can save you hundreds of hours in the long run.

HR processes FAQs

Have a question about workflows or HR process improvement? Here are some of the questions we’re asked the most along with our best advice.

What are the 7 HR processes?

Every business has a slightly different take on what their main or priority HR processes are, but the 7 HR processes that are relevant for most businesses are recruitment, onboarding and offboarding, training programs and development, performance management, employee relations, benefits administration, and compliance. You might have other focus areas outside these too though, like succession planning or talent management.

What is a HR workflow?

A HR workflow is another name for describing a HR business process, and it’s typically broken down into clear steps in a specific order. For example, your HR workflow for onboarding might include steps like sending an email to the new hire, creating a profile for them within your HR software, requesting their contact details, and so on.

How do I set up a HR process?

To set up your own HR process, follow our step-by-step guide above. Decide what your goal is, find a way to automate the process with HR software, train team members, add the workflow to your company handbook, and create a feedback loop for continuous improvement.

What is an end-to-end HR process?

An end-to-end HR process refers to a journey that covers the entire employee lifecycle, from the recruitment process through to offboarding. An end-to-end HR process contains specific workflows within it for each stage of the journey, allowing you to see at a glance what action to take and when.

How do I manage HR processes without an HR department?

If you’re the only person managing HR operations within your small business, introducing workflows can feel like it’s impossible. However, with the help of software like Charlie, you can map out your processes and introduce better ways to manage time off, onboarding, and performance from one simple dashboard. Charlie makes effective HR management not just a possibility but an effortless reality for busy business leaders and CEOs — no HR experience required. For more information, you can also have a look at our guide about when to hire an HR person.

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