Many small business owners get started on the path to entrepreneurship to pursue their passions and offer their own potential to the marketplace rather than to manage employees. But when a business grows, it is inevitable that other people and their needs and wants enter the mix of managing a business.

Entrepreneurs spend a surprising amount of time on HR management:

  • HR work consumes 25-35% of a small business owner’s time. 7-25% of time is spent handling employee paperwork.
  • Companies with fewer than 20 employees have 60% higher compliance costs.

This represents half of all employment relationships: 50% all employees in the U.S. work for small businesses and employment in the small business sector has grown even while hiring by larger businesses has slowed.

Some key statistics illustrate this trend:

  • Small businesses created 63% of new jobs from mid-2009 to 2012
  • From 2004 to 2010, micro businesses (1 to 4 employees) were the big employers creating 5.5M new jobs!...While businesses w/ 500 or more employees lost 1.8M jobs.

And human resource needs and processes are changing. Some considerations for the future of small business human resource management:

  • 1.3 billion employees will work virtually by 2015.
  • Mobile friendly recruitment, properly executed, has a conversion rate 5x to 10x better than PC – at 20% the cost.

Download this month’s SCORE infographic for the full picture of how entrepreneurs are contributing to national employment and how human resource issues affect their businesses. Human Resources Infographic 

About the Author(s)

Bridget Weston Pollack

Bridget Weston Pollack is the Vice President of Marketing & Strategy at the SCORE Association.

Vice President of Marketing & Strategy, SCORE