HR Challenges You Must Overcome as a Small Business Owner


Running a business is a huge challenge, and one particular area of difficulty is managing your Human Resources. Managing HR can be major responsibility, and you’re sure to encounter several challenges as your business changes and grows. But with a little guidance, you can navigate these issues and contribute to the long term-success of your business.


Challenges you’ll face as a small business owner

Inadequate hiring processes

Many small businesses struggle with inadequate hiring processes. Vague and unclear job descriptions that attract unqualified candidates, rushed interviews that don’t fully assess a candidate’s skills and weaknesses, and a lack of follow-up can all be a big detriment to bringing great people on board. Spend some time working on your hiring processes to make sure that you hire the best people for the job at hand, and to ensure that you won’t waste valuable time and money recovering from a bad hire.


Insufficient Training

Employees who are poorly trained can be a liability to the company and to themselves. A lack of proper training can lead to lower morale and higher turnover, so don’t make the mistake of not devoting adequate time and resources to training your employees. This doesn’t just apply to new hires: even experienced employees need ongoing training, especially if you enact new policies and protocols or if they are placed in a new context.


No Formal Performance Reviews

It can seem superfluous to do performance reviews on a small team, when it feels like everyone on the team is well aware of each other’s work. However, you miss out on giving important feedback when you skip performance reviews. Set up a formal process to review your employee performance at least once a year. This will give you the opportunity set goals, evaluate roles within the company, assess pay, and even addresses unmet work expectations and underperformance in a constructive setting.


Lack of incentive structure

Employees that feel valued and rewarded for their good work are much more likely to stick with the company and invest themselves in their work. Try setting up a structure that rewards hard work and that makes your employees feel valued. There’s no one way to do this, but it’s likely that it will have a meaningful impact on your employee’s happiness and performance.


Not enough resources devoted to HR

There’s enough involved in running a business that HR can sometimes seem like a secondary concern. Many small businesses don’t even have a dedicated HR professional: supervisors end up covering HR tasks, and they don’t have the bandwidth or training to do the task justice. A qualified HR professional will be an essential part of your company, especially as your employee numbers grow. And it will be critical to have proper HR resources if and when there are issues with performance, compliance, contracts, and other human resource issues that businesses will inevitably face.


Insufficient Documentation

One of the positive aspects of running a small business is that many of your processes are more informal, keeping you agile and efficient. But this can be a major downside if there are questions from employees about benefits, policies, or if you run into legal situations. Having a complete and up-do-date employee handbook will keep expectations clear and be a valuable go-to resource for your workers, and will alleviate major headaches when questions or issues arise in regards to company policy.


These are common challenges that most small businesses will face at some point, but all of these challenges can be faced and overcome. Your people are your most valuable resource, and if you take the time to set up the processes and resources to appropriately and effectively manage them as such, you’re setting everyone in your company up for success.


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