Top 10 HR Challenges for Small Businesses And How To Deal With Them

Along with cash flow, generating new business and marketing, we know that HR can present a raft of challenges for small business owners. Mel Stead, Managing Director of Optimal HR has been working in HR for 30 years in a wide range of sectors and has put together the top 10 HR challenges for small businesses and what you can do to overcome them.

1. Lack of time or experience to deal with staff issues or put effective contracts and policies in place

This is the number one issue; Business owners don’t have enough time deal with staff issues and brush it under the carpet, hoping things will resolve themselves.  This could mean you are exposing yourself to potential employment issues.

Ask for expert help if necessary to ensure you are compliant with employment law and you avoid any unnecessary problems with staff.

2. Meeting employment law regulations with handbooks, contracts, policies and procedures and job descriptions

These can become out of date very quickly and pulling one from the internet won’t meet your business needs. These are all legally binding documents, so they must be relevant, current and useful in order to add value to the business.

3. Line managers assuming role of the HR with limited HR knowledge and training

This means ‘doubling up’ job roles to cover off HR or promoting people who are technically good in their role but have no line management experience. If your business is growing and you have no qualified HR professional in the company, then you should consider appointing one or outsourcing to a consultancy. As your employee numbers grow, you won’t be able to cover off HR in other roles and you will need proper support.

4. Owners/Management not acknowledging the need of HR

Often leaving these tasks to other members of the team thinking its not an essential part of the business. With legislation being so tight on employment law leaving HR to an untrained team member is a high-risk strategy and could be costly. The cost of using an outsourced HR provider to help you is nothing to losing a tribunal claim!

5. Long term sickness

Knowing how to deal with this and the legal standpoint. Sickness costs the company money and causes delays in efficiencies. Companies often leave employees when they are off sick – out of sight out of mind or they just don’t know what to do  – this is the wrong strategy, and the issue needs to be dealt with in a timely fashion in line with best practice and sympathetically.

6. Performance management and personal development

It can be hard to understand how and when to measure performance and develop staff. Start off by creating personal development plans, in consultation with your team members. Set objectives, goals and a realistic timescale.

7. Training and retention

To keep the best people, you need to provide the right support and training. Often staff are left to identify training courses themselves and sort their own development out, with resistance from the employer. Training should form part of the personal development plan which is set out for each member of staff.

8. Recruitment

Finding the time and mechanisms to vet candidates and attract the right people. If you recruit through agencies you are facing cost implications, but if you recruit in-house you will have to set aside your time to vet applications. Employee referral schemes work well, where they can recommend suitable candidates in exchange for a reward, or outsource to a specialist HR consultancy who will also manage the interview process with you.

9. Reward and recognition of staff

Understanding best practice initiatives. Making a bonus or incentive scheme which is relevant, achievable, accessible and motivational.

10. Resolving conflict

Where do you start? What happens if you get this wrong? It is important to resolve conflict as soon as it arises to prevent the issue worsening and impacting the business brand, reputation or financially.   If conflict arises and its now your skill, it is essential to seek professional advice immediately

In need of some HR advice? Wherever you are in the UK, you can arrange a chat with one of our friendly professional HR advisors at any time.

Call us on 0330 0881857 or email enquiries@optimal-hr.co.uk

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