Balancing Small Business Success & Human Resources

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Usually it's the big, enterprise-sized businesses that make the news.  High volume, big-box business and their impressive branding efforts are hard to escape.  However, I bet you didn't know that 50% of workers actually work for a small business and that small businesses created 63% of the new jobs between 2009 and 2012, the most challenging years of the latest economic recession.  Small businesses are making remarkable strides in the marketplace, albeit subtly.

Small businesses play a big role in today’s economy, even though you may hear less about them than their more famous counterparts.  According to data compiled for “Work With Me, People! Statistics on Small Business Human Resource Trends,” an infographic posted on, micro businesses (companies with one to four employees) created 5.5 million new jobs from 2004 to 2010.  During this particularly challenging economic time, businesses with 500 or more employees lost 1.8 million jobs.  There are likely many reasons why small businesses added jobs and weathered the fluctuating marketplace better than their larger counterparts.  However, small businesses aren’t immune to financial challenges.

As noted in the infographic, businesses with 20 employees or less face up to 60% higher compliance costs. In addition, small business owners spend approximately 25% to 35% of their time on human resources activities.  Paperwork alone requires between 7% and 35% of their time.  Spending so much time on managing the business means less time is spent on customers, products or projects, and other important business operations.  As a result, it can take longer to grow the business because owners are spending less time on marketing, networking, and managing customer relationships.

Well-rounded employees that can thrive in the small business environment can be a valuable asset.  However, employee turnover can be a big hit, costing as much as 75% to 150% of their salary.  Choosing the wrong employees is blamed for 30% of small business failures.  So it may seem that small business owners can either thrive with the support of talented employees or suffer the consequences of high turnover.

Small businesses have the potential to support our fluctuating economy, add jobs to communities, and keep the marketplace moving.  That is if they can manage human resources activities efficiently.  Contact Integrity Data for additional information about managing human resources activities with today’s powerful business technology.

By Integrity Data, Illinois Microsoft Dynamics GP ISV developing enhancements for Payroll and HR

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