Ask small business owners what their number one human resource challenge is and a majority will tell you “attracting and finding quality employees,” according to a Plantronics survey. Among survey respondents, 64 percent said that offering flexible, mobile and remote work options has assisted them in hiring and retaining their key employees.

While the effort to get the best employees possible is always a challenge, your HR responsibilities as an employer are just beginning when new hires comes on board, regardless if the employee works in your office or remotely. Building a solid HR foundation can be one of the most challenging aspects of running a business, yet it is critical for your success.

Several key HR areas to consider in addition to finding talent, include:

Employee File System: Federal law requires that you keep certain employee documents in separate files, advises Zane Benefits.  Specifically, an I-9 form that verifies an employee can legally work in the United States must be filed separately from a personnel file, which will include resumes, payroll information, performance evaluations and other employment information. You need a third file to keep information on an employee’s health or medical issues, insurance and disability.

Employee handbook: There are a number of reasons to create an employee handbook, not the least of which is to avoid any legal issues. A precisely written document on policies with disclosures can avoid misunderstandings that may lead to lawsuits. Topics to cover in your handbook include: hiring practices, pay, benefits, conduct, safety and security and use of equipment. (see: Tips for writing your small business employee handbook.)

Proper pay systems: In “Building an HR Foundation: Paving the Way for Small Business Success,” Linda Martin writes that it’s critical that you develop proper pay practices. The Fair Labor Standards Act (FLSA) directs how employers have to pay their employees, what records needs to be kept and which employees merit overtime. You can find out more at the Department of Labor website at

Training: While hiring the right people from the outset is paramount to your success, training is equally important. Employees need to constantly upgrade their professional knowledge and skills whether they are in IT, marketing or customer relations to keep your business moving ahead. Also by providing training, you send a message to your employees that you care about their career development.

Ideally you want to develop a development plan for each member of your team, which can range from helping someone hone their leadership skills to acquiring new IT skills. The good news is that training doesn’t have to be expensive, which can be a concern if the budget is tight. Online training eliminates travel costs and enables employees to learn at their own pace. Also many associations offer courses. Inviting in professionals from your industry to a brown bag lunch to talk to your group is another training option. You may even select someone on your own team who has a special skill or experience to share their knowledge with the group

Outsourcing HR

The demands to keep on top of HR along with handling customers and managing marketing and sales can be overwhelming. If handling HR is cutting into your productivity but you don’t need a full time HR manager, consider outsourcing. HR outsourcing firms offer trained professionals who can handle the functions you need and are familiar with taxes and state and federal laws involving liability and compliance. They also can assist you with recruitment and hiring, develop your employee handbooks and create policies and procedures for various job titles and administrative processes.