Who Advocates for Small Employer HR? Shifting from a Compliance Necessity to Business Partner

One thing that is consistent between small and large employers is that while HR is advocating for employees, no one is advocating for HR. I’m not asking who is taking care of HR per se. I’m asking who is advocating that they be taken seriously. That they be given the proper budget and tools they need to “HR” effectively. That they be seen as more than just a cost center or as a compliance necessity. HR teams, even in larger orgs, are understaffed, overworked, and overlooked because no one is advocating for them to be taken seriously.

Of course there is nuance between orgs. Even in our small employer space (1-500 employees) some orgs see HR as true business partners, ones who can support business growth the same as every other department. Others see HR as administrative. Glorified executive assistants whose only job is to keep the org from being sued. 

In my nearly 14 years of running this business, I have found ways to shift that latter narrative. I don’t want to say it’s always easy or that my methods work every time. I can say that, if the leader is open, once they see what good HR looks like in a small employer, they are all in on utilizing us as more than just their payroll administrator.

Why HR Gets Overlooked

Before I share how we shift that narrative, let’s first understand why few leaders advocate for HR in small employers. If we can understand the why, then we can combat these beliefs with action that brings a new perspective. 

Compliance Only HR - depending upon the experience of the founder or other business leaders, the idea that HR exists for compliance reasons may be the driving force behind even having HR in the first place. Leaders, especially CEO’s and founders, know that a compliance issue that leads to court, could be costly and even detrimental for their business. They know HR can help mitigate that risk, but, if they haven’t worked with strong HR or in a place where HR does more, then they don’t even know that stronger business partner relationships can exist. 

Reactive HR - driven by the circumstances of managing HR in a small environment, leaders may be only used to reactive HR rather than proactive. The practitioners they have worked with may have not had the capacity to do anything other than barely keep their head above water. When you are doing it all, the ability to take a breath and think proactively is not something that comes easy. Further, due to the low budgets available for compensation in small orgs, the HR practitioners they have worked with may not have had the knowledge or experience needed to do much more than keep the HR processes afloat.

Low on the Priority List - when you are building a business, it is natural to prioritize the things that get you to profitability first. While I can, and will, argue that HR should be a part of that path, most leaders will always see product development, marketing, sales and finance as high priority over other ancillaries such as HR and IT. 

I can not tell you how often a potential client reaches out to us only after they have gotten in trouble from a compliance standpoint or there are strong negative behaviors invading their company culture and realize they may need some help. 

HR is simply not top of mind in small environments until it has to be. Therefore we are brought in to solve an existing problem, not proactively prevent new ones. At least in their mind….

The good news is, it’s possible to change the perception. To show leaders that HR is about more than compliance and can actually help the business achieve its goal while building a thriving employee experience. No one is going to advocate for you, so you have to do it yourself.

Here’s how we do it with our small employer clients.

Understand the Business

If a new head of Marketing or Finance were hired, they would quickly learn about revenue targets, margins, short and long term goals. When HR is brought in, they are often told about employee related topics but not the business as a whole. 

It’s important for HR to understand the business the same as every other leader in the org to make sure that HR initiatives align with goals. I have talked to many HR leaders who are frustrated because a new initiative they want to roll out isn’t getting approved. When I ask them what business goal the initiative is tied to or what the ROI is for the business, they can’t tell me. 

If we don’t understand the business, the initiatives we want to put in place may not actually be the initiatives that matter. 

Here are five questions you can ask that help you understand the business. (Pro tip: If you have been in your role for a while but have never done this, it’s ok to start now. Just say that you are confirming your knowledge around these things to ensure alignment)

1. What are the company’s top strategic priorities for the next 1-3 years, and how do you see HR contributing to those goals?

2. What are the biggest operational challenges the company is currently facing, and how do you see HR playing a role in addressing them?

3. What is the company’s approach to leadership development and succession planning?

4. How would you describe the company culture, and are there any aspects you want to strengthen or change?

5. What metrics or key performance indicators (KPIs) do you use to measure business success, and how should HR contribute to those metrics?

If they don’t know or can’t answer how they see HR contributing in these areas, then you have a great opportunity to show them. If they do know, then you can identify where you may be falling short and create a plan to meet those expectations.

Facts over Feelings

Earlier when I mentioned frustrated HR leaders who can’t get their initiatives approved, it’s often because they feel something will help so they go to bat for it, but don’t really have the facts to back it up. 

Let me share a story. A few years ago an HR leader came to me frustrated that her CEO would not approve an increase in the company cost share for benefits. She felt like employees were really frustrated with the cost and that is why benefit enrollment was so low. I asked her if she had stories from employees to demonstrate that. She didn’t so I suggested a survey focused on benefit offerings. The results of the survey showed that it wasn’t the cost that was deterring participation, but the networks and types of plans offered. They actually had no issues with the cost share at all.

The HRM felt like the cost share was high for the population but had never really asked. When we did, she was able to, rather easily, make a positive change. Bonus, the new plans were cheaper, saving both company and employees money. 

HR isn’t always the best at using data to justify changes we want to make, but when we can, not only are we more likely to make better decisions, we are more likely to get changes we want improved because we have the data to back it up.

Which leads me to…

Speak the Language of the Business

We know to speak in terms of ROI but I feel that is generic advice that can, and should be expanded on, especially in a small environment. 

We have clients across all industries, all states and many with a global presence. My team and I often joke that we feel we have multiple personalities if we are jumping from one client call to the next because they are all so different and need us to speak different languages. Not literally (although some do) but in the way we talk about their business.

Because what is important to them changes. 

Some are built around EBITDA, others margins, still others billable hours. 

Some like to be called companies while others organizations (it may seem silly but it’s important to them)

Some care more about building culture while others are comfortable with what is growing organically. 

Some are future oriented while others are more short-term focused. 

The list could go on but you get the point. Whatever the language that your top leaders speak, you should too. When you are working on processes, workflows or big initiatives, sharing that with them in the language they speak will shift their thinking into more of a partner oriented one. 

The reality is that shifting the mindsets of business leaders to see HR as business partners takes time, relationship building and showing up in the same way that other business leaders do, even if you aren’t in a leadership position. 

It isn’t something that will not shift overnight but no one is going to do it for you. No one is going to advocate for you.  So you have to be deliberate about taking up that mantle for yourself and put in the work to shift how others perceive you. 

In the end, you, your working relationships and the company as a whole will be better for it. 

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