Human Resources and Small Business & Startups

The top 5 HR headaches for small business

August 31, 2019
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Kathy Miller. Courtesy Michigan Small Business Development Center

Admit it: Sometimes human resources can be a pain! Dealing with people, policies, procedures and payroll is often tedious and fraught with the fear of noncompliance. HR is sometimes referred to as “a necessary evil,” but it doesn’t have to be that way.

People are your most valuable assets, and HR is an important tool to help you effectively manage your employees to facilitate business growth and reduce overall risk.

Here are some of the most common HR headaches and cures to help you keep things running smoothly, attract and retain the best employees and avoid compliance issues.

Headache #1: Finding talent

Recruiting new employees is one of the toughest challenges facing small businesses today. With nearly full employment and a growing economy, competition for employees is stiff.

The cure: Start with a good job description. Then write a compelling posting — one that focuses on the candidate and what your company can offer them so they can envision themselves in the job. Post on platforms favored by your targeted candidate: LinkedIn, Indeed, ZipRecruiter, MI Talent and others. Use Facebook and Instagram to show off your company culture and benefits to potential candidates by posting photos and videos. Consider an employee referral program to reward individuals who help you add a new member to the team!

Headache #2: Keeping talent

You’ve hired the right person for the right job in your company. How do you keep them on board, engaged and productive?

The cure: Welcome new employees with a solid orientation program, then keep them engaged with challenging assignments and frequent feedback. Make sure they have the knowledge, tools and other resources to perform their work successfully. Offer competitive wages and benefits, but don’t forget about non-monetary benefits too, like a strong culture, flexibility, and opportunities for professional growth.

Headache #3: Managing performance

Addressing poor performance in one or more employees is the source of some serious HR headaches. Knowing when and how to intervene effectively is critical to maintaining employee engagement and business productivity.

The cure: Prevent problems before they start by ensuring employees have clear goals and they understand what it takes to achieve those goals. Keep employees motivated by providing ongoing feedback and regular performance reviews. Address issues quickly and follow your disciplinary and termination policies in a fair and consistent manner. Consider providing performance incentives rather than punitive measures where possible.

Headache #4: Managing personnel records

Not only is paperwork bad news for trees, it’s the bane of existence for HR managers, too. But if you’re ever subject to an HR audit, it can be a lifesaver, serving as proof of your compliance with federal, state and local labor regulations.

The cure: Go green and move employee records onto a secure, online system. There are many programs available that are comprehensive, yet easy to use and offer options suitable for every business size and budget. File OSHA, I-9, FMLA and other forms online as much as possible. Use an accounting system with a solid payroll module, such as QuickBooks, and pay employees electronically. Consider outsourcing one or more functions: payroll, benefits, compliance, etc.

Headache #5: Remaining compliant

There are a myriad of labor laws and regulations with which you must comply if you are going to hire employees. These regulations shield your business and your workforce from unnecessary risk or harm. Think of them as preventative medicine to protect and maintain your company’s health.

The cure: Knowing which rules apply to your business (location, size and industry) is an important task of human resources management. Subscribe to an online HR blog or legal newsletter to receive updates on labor law changes. Consider an independent review of your HR function to check for best practices and help identify critical gaps. Our organization offers a free Human Resources Assessment to help you review your HR practices.

In reality, there are more than just these five HR headaches. HR is an important but complex function for every small business, and it can be full of challenges. But a well-run HR department is also the key to successful business growth and continuity. To minimize the pain of HR headaches and ensure a happy, healthy workforce, follow these tips and contact one of our local offices for a full complement of free consulting services.