Do Startups & SMEs in Malaysia Need Dedicated HR Managers?

Disclaimer: This article should not be considered to be legal advice, and altHR is not liable for any actions taken based on this article.

As an employer at a startup or SME in Malaysia, you might be wondering: do you really need a dedicated HR manager, or even HR department in your company? Of course, hiring a dedicated professional to handle human resource matters for your organisation will require a considerable amount of investment, and employers with very lean teams might feel that they can handle the job themselves. 

However, it’s important to understand hiring a dedicated HR manager/department means that you are investing in the human capital of your organisation. As we’ve said many times, a company’s greatest asset is always its people — which means that there needs to be a priority placed upon managing the workforce in your company. 

This fact remains true even if you’re a small business or startup — so long as you have people to manage, you should have a HR department. 

Why do startups and SMEs need HR managers?

If you’re running a small company, it’s important to understand that HR managers play a crucial role in the day-to-day running of the business. Job functions for HR departments can include: 

• Recruiting talents 
• Screening candidates 
• Processing payroll 
• Managing employee benefits 
• Onboarding/offboarding 
• Employee training 
• Designing HR strategies
• And more

Having a team of specialists to handle the above will free employers of smaller organisations to focus on the bigger picture, as well as other core elements of the business. Additionally, HR isn’t simply a matter of signing contracts or paperwork — it requires research, skills, and training. 

In fact, your time as business owners can probably be better spent elsewhere — perhaps sourcing for beneficial partnerships, or even designing strategies and revenue-generating streams. Leave HR to the specialists.  

HR is more than just paperwork

As your business grows, so will your headcount and organisation in size (in most cases). Once you’ve gone past a certain number of employees, a dedicated HR practitioner — or even a team — will help to ensure that there are minimal disruptions to the workforce. HR can help to ensure that the workforce remains productive, while mitigating potential disagreements, and managing the performance of your employees. 

In general, you can expect to reap some key benefits for your startup/SME organisation with the right HR people in place, including: 

1. More collaboration and innovation 

You might think that innovation requires investment into talent. While this is partly true, having a dedicated HR team at your business means that you’ll have specialists recruiting the most suitable talent for your organisation — and with a diverse workforce, you’ll have more innovation and fresh perspectives for your business.

In 2022, you should also make strides towards facilitating a collaborative workplace. According to studies, employers can expect an improvement of up to 5 times the usual performance with collaborative teams, with employees being more motivated to achieve their goals and targets. In fact, experts even predict that collaborative workplaces increase innovation by up to 15%. 

2. Improve employee engagement & retention

There are a number of ways to improve employee retention, including Search Engine Optimisation for your business’ digital presence, employer branding, and by taking a human-centric approach when designing your firm’s recruitment process. However, this all starts with hiring a solid HR professional to design overall engagement strategies — thereafter improving retention rates. 

With the right HR policies in place, you’ll see employee retention improve, while having a skilled HR practitioner will go a long way towards improving the employee experience of your team. This, in turn, will improve employee engagement, which should lead to improved (again) performance for your workforce. 

3. Better HR strategies

This, of course, depends on the quality of your HR team. In general however, good HR teams will be able to keep abreast of the latest HR trends, conduct gap analysis exercises, and ultimately, design better HR strategies to improve the human capital at your organisation. 

For example, you can look into implementing Diversity, Equity, and Inclusion (DEI) initiatives for your company in 2022 (read about the benefits here), while HR professionals can also prioritise on ensuring that the workforce is digitally resilient for the future. As we go through a challenging time in 2022, it’s worth noting that digitalisation remains crucial to the success of any business — having the right people in place to manage HR is a core decision in that regard. 

Meanwhile, if you’re a solo HR practitioner — or you’re working in a small HR team — click here for some incredibly useful tips.