Most small businesses do not have an HR department, and most do not need one in their first years. But HR work does not wait until you can afford a specialist. It starts the day you hire your first employee. The real question is not "do we need a department?" but "who is doing the HR work, and is it being done properly?"
The HR basics every employer needs
Even a team of three should have these covered:
- Written particulars of employment. Employers must give employees written details of their terms, usually in an employment contract.
- Payslips and correct deductions, with PAYE and UIF handled properly every month.
- Leave and attendance records that match your leave policy.
- A disciplinary code and procedure your managers can follow fairly.
- Personnel files with signed documents, ID copies and review records.
- Registrations with the UIF and the Compensation Fund.
- Employment equity obligations, if your business is a designated employer.
The four stages of HR support
- Do it yourself with good templates. Fine for one to three employees, as long as the templates are correct and you keep records.
- Outsourced HR support. A consultancy handles contracts, policies, payroll, recruitment and disciplinary processes when you need them. This suits most SMMEs from their first few employees upwards, because you pay for the work, not for a full-time salary.
- A part-time HR practitioner. Useful when HR work becomes steady but not yet full-time.
- A full-time HR manager. Makes sense once you have a larger workforce and enough HR work to keep one person busy.
Signs you need help now
If you are guessing, you are already taking a risk.
You may need support if staff have no written contracts, you are unsure whether your UIF and PAYE are up to date, a manager has dismissed someone without a hearing, or you spend more time on staff admin than on your customers.
Where to start
Pick the one gap that worries you most, usually contracts or payroll, and fix it first. Then work through the rest of the list over a few months. Hiring, onboarding and keeping staff should not need a department. It needs the right help at the right time.
This article is general information for South African small businesses and is not legal, tax or financial advice. Rules, fees and dates change, so confirm current requirements with the relevant authority or speak to us.