The following is the third in a series of four articles written by Tara Nurin exclusively for ProBrewer. Visit the ProBrewer Diversity, Equity, and Inclusion resource page for additional DEI articles and resources.
What word first jumps to mind when you hear the term “human resources?” What comes next? How about after that? Chances are, you associated “human resources” with concepts rooted in hiring, payroll, benefits, training, workplace policies, diversity, harassment, discrimination, labor laws, vacation, team-building … and the list goes on.
These responsibilities require a keen aptitude for multi-tasking and a vast variety of skill sets. If you’ve saddled one person in your brewery — whether it’s an official HR rep, a random manager or even yourself — with all of this, you’re truly asking a lot of that person. Now consider the fact that a brewery may have multiple locations across multiple states or countries, as well as restaurants that support myriad dissimilar positions, and you’re really starting to feel bad for these HR pros, aren’t you?
Presumably, you, as the one in charge at your brewery, have named someone specific to at least manage payroll, hiring and firing. And if you’re reading this, you’re probably open to the possibility of expanding your HR offerings to encompass other critical and/or “nice-to-have” functions. But establishing an HR presence for your brewery can be daunting, not to mention expensive, and, as the exercise above shows, not necessarily suited to just one person. So how do you know what to prioritize, whom to appoint and when to turn to qualified outside companies or consultants for help?
This guide can help you get started.
When Short’s Brewing in Michigan advertised for an HR manager in 2015, the job posting listed 35 different responsibilities, plus more physical requirements and skills than that. Elizabeth Dewey, who took over the position in 2019, handles this head-spinning number of duties, save a few aspects of payroll and healthcare benefits, for almost 200 workers pretty much by herself. She regularly rewrites portions of the employee handbook and is single-handedly designing and running Short’s trainings on safety, racial injustice and sexual harassment. She says the average HR salary in her region ranges between $50,000 and $80,000, and she’s on call all the time.
“Our brewing facilities are open 24/7, and our pub is open to ten or eleven at night,” she says. “Saturday morning someone might call me with a question about insurance.”
Generally, the functions of an HR department or point person like Dewey might be broken down into the following four categories:
Contracts: This is as basic as it gets. If you want even one person to legally work for your brewery (which, in some cases, includes yourself), you need to hire them, submit their paperwork to the IRS, pay them and in some cases, fire them.
Compliance: In a fast-moving process that California craft beer attorney Candace Moon says brings new changes about twice per year, public governing entities — from the feds all the way down to your municipality — set laws that govern your business’ treatment of employees. That means you’re responsible for adhering to everything from your local minimum wage to paying overtime for working the national Juneteenth holiday. Requirements grow alongside the size of your staff, and failure to comply with applicable employment laws can result in hefty fines.
Customs and conflict-resolution: What do you expect from your employees and what happens when they violate your standards? This category deals with policies (that you’ve hopefully codified in an employee handbook or at least a code of conduct) and the process for handling violations. Writing down, publicizing and uniformly enforcing your policies can protect you against unlawful termination lawsuits.
Corporate Culture: Congratulations if you’ve advanced to this level. It means you’ve probably already set up systems for the previous three, and now you’re proactively investing in your employees by offering them opportunities for professional and maybe even personal development, as well as planning team-building and morale-boosting activities.
Options for Outsourcing HR
Happily, you don’t have to figure all of this out on your own. Many breweries opt for a hybrid approach — keeping some HR activities in-house while outsourcing others. A common approach involves hiring a consultant to get them started and a professional employer organization (PEO) for rote, ongoing tasks.
PEOs work through a contractual arrangement called “co-employment” that allows your company to share employment responsibilities with an “employer-of-record.” Whether through proprietary software or an actual team of people, a PEO assumes responsibility and liability for easily automated tasks like new hire and payroll filings and benefits administration, while some also offer sexual harassment trainings, hotlines, and the like. As an additional bonus, some PEOs can fetch better rates and perks like 401Ks and wellness services by aggregating their clients to more powerfully negotiate with providers.
But Shanelle Rae, a specialist for the Table HR brewery and distillery consulting agency, calls the PEO model in the hospitality sector “a bit antiquated” because she says these organizations no longer want to take on liability for owning any mistakes they make in an industry so riddled with unique regulations and poor compliance.
Instead, Rae says the advisory role of a consulting firm like hers allows clients to customize their mutual relationship more readily than with a typical PEO. Table HR, for instance, provides a la carte services like a sexual harassment training for approximately $2000, depending on the number of employees; quarterly diversity, equity and inclusion training that starts at $500; and a handbook review or development that starts anywhere from around $1000 to $3000, again based on a variety of factors. Table HR, like others, also provides ongoing advisory services of all kinds.
“You can hire for run of the mill things but sometimes you just need a sounding board,” Rae says.
And sometimes you just need someone to help get you off the ground. For between $500 and $1000, Moon — who provides some resources free through her new company, Start a Brewery — sells new-hire information packets that ensure adherence to existing labor laws. Add-on bundles cost a few hundred dollars and include standard personnel forms that cover areas like performance reviews and common job descriptions.
When To Outsource HR
While Moon recommends small breweries hire in-house personnel for repetitive paperwork and call in trained, impartial outsiders when a people problem, like discrimination, threatens to emerge, an opposite line of thinking favors outsourcing tasks, like payroll and compliance, that don’t usually require too much of a human touch.
An outside entity, well-versed in labor laws and employment issues, can prove exponentially more efficient than a brewery owner with no experience in these matters. It also goes without saying that offloading HR tasks frees up staff to focus on other priorities. Beyond that, an independent actor has a greater appearance of impartiality than an insider in a sensitive interpersonal conflict and ostensibly has the necessary training and experience to help resolve it.
Additionally, as we saw in the sexual misconduct controversy that engulfed Kansas City’s Boulevard Brewing at the beginning of 2021, an internal HR presence can be viewed as too cozy with management, untrustworthy and, as the expression goes, “working in the interest of the employer, not the employee.”
However, a corporate contractor with a roster of clients might respond to issues less quickly and risks presenting an impersonal face in personal matters like discrimination and insurance claims.
Loose consensus among specialists suggests that small start-ups purchase and contract out as much as they can afford because the common per-head pay structure of outside entities will likely cost less than an employee. With few employees and an expectation that they’ll wear many hats, managers and owners can fulfill remaining functions.
That said, a growing brewery needs to realize that it becomes subject to ever-more labor laws as they add to their employment ranks, and that employees expect a more professional and rewarding workplace environment the more established that workplace becomes. Plus, as the post-pandemic era brings labor shortages and demands for greater dignity, flexibility and opportunities for self-actualization in the workplace, prospective workers have the luxury to be choosy.
What does this mean for owners? More attention placed on finding just the right HR fit.
Here are some additional resources:
Brewers Association: https://www.brewersassociation.org/hr-third-party-resources/