11/25/2014 01:46 pm ET Updated Jan 24, 2015

Is Your Small Business' Human Resources Department Failing You?

No one wants to admit failure, but if you want to see improvement in your small business, you need to take a closer look at your human resources department. While some businesses have tried to cut costs by eliminating their human resource departments altogether, it's a critical component to the success of your business. Of course, if you don't want to deal with having an internal HR department, you can always outsource human resources to a professional.

As we get closer to a new year, now's the time to work on improving your HR policies and procedures. Start 2015 off right with human resources that produce the best results with the most cost-effective solutions for your business. Here are a few points to consider.

Find the Faults
You cannot improve your human resources department without finding out where it is failing you. This requires you to do an in-house audit of your HR operations and procedures. Chances are that you'll discover many areas that could be improved with a few adjustments. A specialist can help.

Improve Communication
How does your HR department communicate with employees? Do they send out pointless newsletters with boring content that employees are unlikely to read? Your HR communications should be clear, regardless of how they're delivered. Make sure they're interesting to read, but still convey the vision and values of the business.

Align Your HR Department With the Rest of the Company
Yes, your human resources employees work for you and they are technically part of the company, but do they act like it? When HR departments act like their own business entity, it automatically creates a rift between employees and HR. Your human resources department should be an active participant in the company, employees should know them, and approaching an HR staff member shouldn't be like approaching a vendor.

Create a Budget For Support or Learning
As a small business owner, you have a responsibility to monitor how your HR department sets its budget. It should allocate funds for learning and support programs that help advance employees in their current positions. There should also be funds for continuous training for your human resources staff--such as sending them to seminars, conferences, and morale-boosting activities. Also, paying for their membership in a professional organization such as SHRM demonstrates that you care about and value their development in the field of human resources management.

Ask For Feedback
Your human resources department designs the policies and procedures that your employees must follow. But how often are those policies reviewed and how often do they include employee feedback when revising those same policies? HR should talk directly to employees and help analyze the root of any inefficiencies in the workplace. Also, by discussing it with employees, you can help pinpoint specific policies and procedures that hinder employee performance and lead to disengagement.

Lead by Example
Employees will respect human resources a lot more if they see them doing what they demand of employees. If HR isn't willing to demonstrate the same level of commitment, it cannot expect employees to comply nor penalize them for not toeing the line.

Embrace All Generations
It's unlikely that your workforce is compromised of just one generation. If your HR department treats your employees all the same, you won't see favorable results. It's important that HR recognizes the different generations of staff (e.g., Baby Boomers, Millennials, etc.). Make separate goals, policies and procedures, and even ways to manage those team members so that everyone experiences job satisfaction.

An inefficient human resources department is a common cause of employee turnover. It is responsible for talent acquisition and, more importantly, retention. If you are noticing high turnover rates, it may be time to look at your human resources department. Learn more about how you can prevent costly turnover and improve your HR department by ordering your copy of Practical Tools to Manage Costly Employee Turnover today.

Margaret Jacoby, SPHR, is the founder and president of MJ Management Solutions,a human resources consulting firm that provides small businesses with a wide range of virtual and onsite HR solutions to meet their immediate and long-term needs. From ensuring legal compliance to writing customized employee handbooks to conducting sexual harassment training, businesses depend on our expertise and cost-effective human resources services to help them thrive. This article first appeared on the MJ Management Solutions blog.

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