This article is part of a larger series on Hiring.
An HR manager plans and directs the HR functions of a business. They may oversee a small staff, spearhead company recruiting efforts, manage the hiring process, and meet with business owners to discuss HR objectives and compliance issues. Before hiring an HR manager, determine your needs and what you can pay. Then write your job ad, screen and interview candidates, check references, run a background check, and make your offer.
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1. Determine Your Needs
Before moving any further, ask yourself if you need an HR manager. HR isn’t glamorous, won’t help your business rapidly increase sales, and is frequently seen as a speed bump to company growth. However, with the right tools HR can increase employee engagement, reduce turnover, and help your small business attract top talent in your industry, all while keeping your company compliant.
HR is part of your business operations. HR managers may have extensive knowledge of HR laws and, when your business grows, you may suddenly become subject to certain federal and state laws. If you don’t ensure compliance with these laws, you could face serious fines and penalties from government agencies or employee lawsuits.
Maybe you’ve been handling HR-related matters and want to pass those duties off. Maybe you’re noticing higher turnover and want to have an HR manager assess your company’s situation and make some changes.
Assess whether or not they can do the following:
- Build and execute an HR strategy
- Manage company compliance and risk management
- Handle payroll and benefits administration
- Recruit and train new employees
Do any of those strike a chord with you? If so, an HR manager may be able to help you address your concerns and manage your HR compliance and employee relations.
Assessing your needs will help you figure out what type of HR manager to hire. You might realize that you don’t need a full-time HR manager and that you can save money if you bring on a contractor to provide five or 10 hours of HR support and guidance each week. Perhaps you’re planning rapid growth and you’re aware that you’ll need a dedicated HR manager.
2. Write a Job Description
Hiring an HR manager starts just like hiring any other employee—with a job description. Some HR managers will have more hands-on experience dealing with personnel issues, while others will have more legal compliance experience. Knowing which type of employee you need will help you focus your job description.
A clear job description will help you attract the right candidates. You may want to adjust the title of the role as well. If you’re looking for a full-time in-house employee to manage all facets of your company’s HR, then HR manager will suffice. If you’re looking for a contractor, consider calling the position an HR business partner or HR consultant. If this job requires someone slightly less experienced, consider using HR administrator. When you choose the right job title, potential candidates can see right away what level of qualifications you are seeking and how much they will be compensated.
List the specific duties and responsibilities in your job description. If you want to ensure legal compliance, for example, list employment law experience as a requirement. Regardless of the level of experience you need, there are certain skills every HR employee should have:
- Analytical skills
- Ability to keep conversations and information confidential
- Conflict management skills
- Knowledge of HR best practices
- Prior use of HR software
Listing these skills will help you weed out applicants who don’t meet your minimum standards. Hiring an HR manager will take time, so anything you can do to reduce the number of unqualified candidates is helpful.
Set a Salary Range
While you should have created a general budget for this position, make sure you do research to ensure you’re offering a competitive rate. Look at what your competitors in your area offer new hires. The average HR manager salary is over $100,000. The specific amount you need to pay will depend on the talents and experience of the person you’re hiring, where your business is located, and the duties you need this person to perform.
You also need to refer to your state laws. Some states require you to put a salary range in your job posting. So you need to be prepared to make this information available to applicants.
Whatever you do, don’t shortchange the person—that often leads to resentment and a feeling that they are not a valued team member. You don’t have to spend a fortune, but you should pay a competitive wage.
3. Post Job Ad & Review Applicants
You can post your open position on one or more of our recommended job boards. Once you receive applicants, review their qualifications. You may receive many applications in a short period so going through each applicant quickly will help you keep on top of the candidates and ensure that you don’t delay so long that a highly sought-after candidate takes a job elsewhere.
To help you quickly sort applicants, have a list of your must-have qualifications. If you need your HR manager to help keep your company compliant, look for qualifications which show the candidate has experience managing corporate compliance, like someone with a law degree. If your HR manager position is more focused on performance management, look for candidates with HR certifications. Having a short list of half a dozen top skills and qualifications will help you screen the resumes faster and more effectively.
We strongly recommend asking for referrals. Whether from your own employees or other small business connections, referrals are often some of the best hires companies make. They’re more likely to fit your company culture and stick around.
4. Schedule Interviews
After you have reviewed the applicants, it’s time to schedule interviews with the most qualified individuals. Try to keep your interviews to just a handful of people. You don’t want to overwhelm yourself with too many potential hires.
During the interviews, ask similar questions of every candidate so you can evaluate them on similar responses. Consider posing real-world situations to candidates to see how they would have handled the issue with your company.
Here are some good questions to ask every candidate:
- What are the most important policies you would review or create in your first month?
- How do you ensure confidentiality when someone makes an HR complaint?
- Tell me about a time you handled a difficult and tense HR situation.
- Tell me about a time you recommended a policy but were told by your manager not to implement the policy.
- If you were hiring for this position, what questions would you ask?
- Tell me about your experience building and leading an HR team.
A few of the above questions attempt to have the candidate respond to situational questions. While you’re not intentionally trying to trip anyone up, you want to make sure the candidates are familiar with some basic HR laws. You need to rely on this person to keep your company compliant. If they don’t know basic employment laws, they may put your company at risk.
5. Call References
Making reference calls is a vital part of the hiring process, especially when hiring an HR manager. You need to get at least three supervisory references from recent jobs for each of your final candidates, which you should narrow down to about three. Having too many final-round candidates could make your decision harder than it needs to be, wasting precious time.
When you call a reference, make sure you ask at least the following questions:
- How long did you supervise this employee?
- Did they ever make an HR or legal mistake?
- How do they handle conflict?
You don’t need to spend a lot of time with a reference, but you do want to get a decent sense of what it’s like to manage this person. References can give you insight that you won’t get from the candidate directly.
Check out our guide to doing reference checks for help with how to do them and what questions to ask.
6. Run a Background Check
Running a background check on an HR manager is a good idea. Keep in mind that certain states require background checks to be run after a job offer is made. To stay compliant, double-check your state laws.
Because an HR manager will have access to sensitive and confidential information about your company and your other employees, it’s a good idea to run a background check to make sure they don’t have a criminal record. While you don’t need to run a financial background screen, you should at least do a standard seven-year criminal check. If you don’t and sensitive information is stolen, your company could be accountable for negligent hiring practices and suffer a significant loss of trust among your employees.
If you need help performing a background check, use one of our recommended background check providers.
7. Make an Offer
Once you have determined the candidate you want to hire, call them. Speak with them briefly and convey the good news. This gives you the chance to gauge their reaction and excitement level, while also giving you both time to hammer out any last minute details like how much notice they need to give their current employer.
After all of the specifics have been worked out, send a formal offer letter to the chosen candidate. In the offer letter, make sure to include important details like title, salary, start date, and benefits. Be sure to include the job description and have them sign off on it, attesting to their ability to handle the core duties of the position.
Give the new employee about a week to return the offer letter. This gives them time to review it and speak with any family members.
Hiring an HR manager doesn’t have to be a laborious process. With the right tools at your disposal and a clear grasp of what you need this person to do, you can make an informed decision. But don’t rush it—if you cannot find the right person for the job, keep looking. This is a critical position, and you’ll need someone qualified to assist you in keeping your small business compliant and your employees engaged.