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Most Common HR Challenges for Small Businesses

Posted On: 04/05/2018

Working for a small business has many benefits; it’s more personable, there is a greater understanding of the business goals and, with a smaller stage, work gets noticed increasing the chances of promotion. With the support of an experienced HR team the company will continue to grow.

But, unfortunately, many small businesses ‘Do It Yourself’ when it comes to human resource related tasks and can become victims of common HR pitfalls. Here’s our top six most common HR challenges faced by smaller organisations, and why seeking advice from a HR Consultancy could save your company money, time and your reputation.

  1. Line managers taking on a HR role: Delegating HR related functions to a manager with limited knowledge and training is a high-risk strategy. Legislation on employment law is complex and ever-changing and, without the support of a HR professional, an issue dealt with incorrectly could prove very costly. The manager’s duties will also suffer as these unrelated tasks take up valuable time. From payroll tasks to dealing with an employee who regularly comes in late will reduce the manager’s productivity which in turn will affect the profitability of the business.
  1. Recruitment: To attract the right people, the recruitment process must be executed correctly. Recruiting through agencies has high cost implications so may not always be an option. In-house recruitment takes up valuable time and you need to be conversant with the current law surrounding recruitment and hiring. To ensure your company is making best use of its money and time it may be beneficial to ask for advice from a specialist HR consultancy. A professional can support your company with all aspects of the process from writing the job description through to the interview stage and implementing psychometric assessments.
  1. Long term sickness: This is a highly sensitive topic and one which must be handled sympathetically. Inexperienced managers may feel awkward discussing sickness with an employee, but with support to identify key questions to ask, as well as what issues to avoid, the process can be made easier for both parties. Employment law surrounding sickness can be confusing as it is difficult to define what is ‘reasonable’ or ‘fair’; misinterpreting this law could potentially lead to a costly dispute.
  1. Conflict: In large offices, differences and arguments are inevitable but small businesses are not immune to them either. When conflict arises, it is important to resolve the issue swiftly and amicably as unresolved disagreements will spiral to deeper problems and could result in resignations and absenteeism. Handled professionally the team can be put back on track with a positive outcome.
  1. Performance management: For businesses large or small, performance management is important. Effective performance management will bring the best out of your employees, keep them motivated and builds a strong, supportive workplace culture. A manager without relevant training or coaching from a HR expert can soon demotivate their team and appear to be ineffective. Understanding how to measure performance, develop staff, and set objectives is key to creating a successful and effective performance management plan.
  1. Training and retention: With the right support and training, your company will retain its staff who will grow with the company. Sadly, staff in small businesses are often left to investigate training courses themselves and must put forward a case why it would be beneficial to them and the business. A HR consultant will be able to help identify training needs, both business wide and individually, enabling personal development which will make the individual feel valued, instead of forgotten about.

Here at P3 People Management, we understand that issues in small businesses can be difficult to manage – we work exclusively with small businesses. With our support your business can save time and reduce the risks associated with all elements of employee management and employment law. Our friendly, highly qualified team can provide support through emails, over the telephone or face to face to help you get the best out of your workforce. By sharing our expertise your organisation will have the knowledge and confidence to take appropriate action in a timely manner.

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