If you’re the owner of a small business, you may feel tempted to cut costs wherever you can. However, some organizational departments are vital to ensure the successful growth your business deserves — regardless of your business sector. If you can’t hire an in-house team for these resources, outsourcing may mean the difference between stagnancy and growth.
Whether you operate a large or small business, you need human resources. Professionals dedicated to human resources can give you and your employees the support you need to help grow and protect your return on investment (ROI).
The importance of Human Resources
If you run a business based in the US or the UK, but have offices in Europe or European clients, you may not be able to navigate the complexities and differences of EU Human Resources practices on your own.
In order to reduce your risk of legal liability should Human Resources issues arise, you need HR professionals who can navigate through those murky waters for you. An accountant or marketing professional shouldn’t be expected to take over HR work. You should utilize a team that specializes in HR.
What is Human Resources?
Human Resources is the business department that handles administration of employee benefits, workplace grievances, hiring, insurance, and training policies and procedures.
In-house versus external Human Resources help
A US-based study reflected that 31% of employees with a Human Resource workload feel unqualified for their jobs. They haven’t received the proper training to ensure the HR department runs smoothly. The Hartford reports that 54% of US-owned businesses keep HR in-house.
However, within a small business, an entirely separate in-house HR department may prove difficult. You may think, “My business only has 10 employees–surely they can approach me should a problem arise.” An employee may not feel comfortable addressing certain HR issues with you. An excellent HR team can also allow you to focus on your business operations and keep your employees happy.
An outsourced HR team can approach your needs without a bias, and give you a well-rounded perspective on employee benefits and training needs.
How Human Resources helps with ROI
HR can prove integral to the ROI of your small business. Seasoned Human Resources professionals know how to protect your workplace and ensure safe working conditions. HR can also improve your ROI in the following ways:
- Strategic implementation of training and benefits programs: Actionable plans that allow overall organizational success as a result of human capital. HR will also determine where training is needed and schedule employee training.
- Benefit analysis: Determining the right benefits packages, based on employee retention, size of staff, and other factors, can help your business remain within budget.
- Reduction of liability: By quickly identifying and addressing issues of workplace safety and unfair labor practices quickly, HR specialists can help reduce your liability and exposure to lawsuits and other legal issues.
- Development and recruitment, and training: Human Resources is also responsible for helping you to attract and retain the best employees. HR practices can reduce employee turnover by ensuring employee satisfaction and employee input into the development of your business.
- Legal compliance: The right HR team is well-versed in any local or federal laws with which you need to comply. They’ll monitor compliance and necessary paperwork so you can focus on growing your business.
The differences in US, UK, and EU Human Resource Management
There are key differences in Human Resources practices in the US, UK, and Europe. If you’re looking to expand your small business internationally, it’s vital that you’re aware of these differences. Let’s take a look:
There are federal laws in place that HR must comply with in the UK, US, and EU. However, the laws surrounding HR aren’t universal.
In the US, a written contract of employment isn’t required. However, in both the EU and the UK, the employer must write up, and both the employer and employee must sign a contract of employment.
As you can see from this list, family leave laws vary drastically in the UK, US, and EU:
- In the UK, maternity leave of at least two weeks and up to 52 is required.
- Paid adoption and paternity leave also exist in the UK.
- Unpaid parental leave of 18 weeks per child is also offered in the UK.
- In the US, up to 12 weeks of unpaid leave can be taken.
- There are no federal requirements pertaining to maternity or paternity leave in the US.
- In the EU, maternity leave of up to 18 weeks is offered and unpaid parental leave of up to four months can also be granted.
Guaranteed vacation time
UK businesses are mandated to offer at least 28 days of vacation (or holiday) paid time off per year. In the EU, workers must be offered a minimum of ten vacation days and 12 paid holidays yearly. In the US, there is no requirement for vacation or holiday pay and it is up to the discretion of the employer.
In the US, there is no right to a pension. In the UK and in Greater Europe, there’s a guaranteed pension for employment — both the employer and the employee contribute to this fund. However, the US requires Social Security taxes on each paycheck.
Privatized health insurance
Although US companies with less than 50 employees don’t always provide insurance options for their employees, most give their employees the option. In the UK, the NHS offers free health care.
Nonetheless, individuals may purchase private health insurance on their own. In the EU, most countries offer some form of universal health care. Private health insurance options vary from country to country.
In the US, sick leave varies from company to company. It often falls under the broad umbrella of paid time off (PTO), or, is given in limited increments. In the EU and in the US, sick leave often requires a written doctor’s note as well. In the UK, sick leave can be paid for up to 28 weeks, based on diagnosis.
These are just a few examples of how the nuances of Human Resources can vastly vary when you expand your small business to other countries.
How Europe HR Solutions can help
If you’re a business owner located in the US or the UK and looking to expand your business in Europe, Europe HR Solutions can help you navigate through the complex legalities of European HR. You should be able to focus on your business without having to stress about cultural differences or compliance with local laws.
Our team has supported companies in over a dozen countries by taking care of their Human Resources needs. As your outsourced European HR professionals, we will provide you with the legal knowledge and project plans you need to operate in European countries. We’re an extension of your business, and want your employees to thrive.
A small business does need a Human Resources department, but you don’t have to take on this complex work on your own. Contact us today and let us take care of your international HR so you can focus on growing your successful business.