Posted 11 months ago - by Priscila Solis

4 Things an HR Professional Should Consider in A Small Family Owned Business

It is common for family-run businesses to leave final decisions in the hands of owners and other senior relatives. Despite how hard they try to comply with federal, state, and local labor laws, there still may be some difficulty when family members are involved. An HR professional that works with small family-owned businesses must uphold certain responsibilities while navigating the existing power dynamic within the business.

Here are 4 ways to improve and navigate through a family-owned businesses HR processes:

1.Familiarize Yourself with the Organization’s Culture

Regardless of what kind of business an HR professional is working with, implementing changes and practices works best with a full understanding of the company’s culture. Time should be spent learning the complexities of the values carried by the family business owners. This effort can begin by interviewing senior family members about:

• What they believe to be the company’s greatest assets.
• What place the business has within the community/industry.
• How they want to present their values as a company to both clients and employees alike.

Understanding these key factors can help guide HR professionals when developing HR and recruitment plans for an organization. The processes and procedures should align with what the company believes in so they are easily implemented going forward.

2.A Relationship Between the HR Professional and the Company Leaders is Key

Trust between company leaders and HR professionals is key to getting everyone on the same page. Leaders may often feel hesitant to invite HR into important meetings out of fear they may say or do the wrong thing.

Open communication and setting clear expectations can help with establishing that much-needed trust. Keeping an ongoing conversation will bring the opportunity for providing constant solutions to their ongoing challenges. Once the leaders start to see the value in the solutions, they start to see HR as a trusted advisor.

Creating this relationship may not always happen right away. It may also take considerable time and effort to go from HR to a strategic partner. However, once that relationship is established, HR and family leaders can work seamlessly with the best interests of the business.

3.Make the Importance of Compliance Clear

As an HR professional and potentially an outsider to a family-owned business, you can provide an outsider perspective on various compliance matters. These tight-knit organizations often have a set way of doing things that may not always meet compliance standards. In cases like these, they may be violating labor laws unintentionally. Many small businesses do not have the financial resources to cover costly mistakes.

Therefore, it is HR’s responsibility to not only educate employers and leaders regarding labor compliance, but to also make clear what consequences may lie ahead.

Making informed and clear recommendations gives the company’s leaders the tools necessary to make the best moves. It also connects back to the established trust by showing leaders that you are on their side not against.

4.Hiring Needs to Be Objective

Making sure that hiring remains objective in a family business can sometimes be an issue. It should go without saying but all hiring decisions must be based on the best candidate and not family lineage.

To ensure that the hiring process remains objective, create a clearly written employment policy that all leaders fully understand. Upholding strict hiring policies can help maintain a culture of fairness and opportunity.

HR professionals new to a tight-knit, family-owned business can always choose to start small and work up to larger issues. Good HR policies are always important, regardless of company size. Coming in and working your way up to the bigger picture allows leaders to adapt to new changes.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.