Human Resources Tips for Small Business Entrepreneurs

In today’s competitive business world, human resource plays a key role in staying ahead of competitors. The entrepreneur should maximise his focus on workers for a successful business model. In case of big companies like Apple, Google and Facebook, workers’ performance and ability are measured either by artificial intelligence or by a human resource department – which enables these companies to check productivity and gain more insight about the issues and individual action.

Fixes can be done immediately if the company sees a downgrade in performance.

The operations of your small business depend on reliable staff providing the service that customers need and expect. Many entrepreneurs understand both inside and outside their product and business model, but they know surprisingly little about employee management.

Too often this leads to workplace chaos, inadequate staffing and sometimes unnecessary legal issues. Here are eight tips for small business entrepreneurs on human resources.

Communicate Often

Communication is essential for a business to operate smoothly. This is particularly true with regard to human resources. Regular meetings are needed to communicate business policies and seek feedback, but they are just a beginning. You also need an open-door policy to enable people to report issues before the next meeting or to tell you things they are not comfortable discussing before the team. Be open to listening to the thoughts of others. On the other hand, it is a mistake to say you have an open – door policy but to discourage them from expressing opinions with which you disagree.

When dealing with HR issues, be as specific as possible. Be clear about the duties to be assumed by the new hire. Specify the formal policies to be followed by your employees. In company policy, try to avoid grey areas as this can result in confusion or double standards.

Whether training new company hires or training your current staff in new policies, be clear and concise about what’s needed.

Another tactic is to provide useful feedback throughout the year rather than waiting for the annual employee assessment to tell them where they’re doing well and where they’re falling short.

Stay Organised

It is a vital component of human resources to be organized. You’ve got to stay organized. Prioritizing tasks and getting used to day-to-day queries helps you stay on top of all. Prioritize each task depending on how important it is to arrange interviews for a new hire or address potential violations of rules. And take the time to sort out your task list every week so you don’t miss something important or spend time working on something that’s no longer a problem. In this process, HR software can help you, but it’s not a cure – all.

 Know the Relevant Laws

A small business owner is unable to know all the human resources laws, but they need to know the most relevant major laws. For instance, if you don’t know the minimum wage and legal standards for working conditions, you guarantee problems. Employees of Human Resources should know these laws even more. They should ensure that both the company handbook and the actions of your employees are in compliance with the law. If you want to keep up with the latest developments, you should consider obtaining a qualification for human resources or taking some basic HR courses.

Take Time to Hire the Right Person

An empty job means you’re losing money for small business owners as small businesses almost never hire someone unless they really need them. Team gaps create stress for all. Many business owners rush to fill the first person appearing qualified with these holes. That may be a mistake, though. You can hire someone who doesn’t fit the culture of the company. You may choose someone who doesn’t fit your team or the role they’re hired for. It is worth taking some extra time to ensure that beyond qualifications and eligibility they are a good fit for the job. And never rush background checks and fail to verify somebody’s qualifications.

Invest in Onboarding

Almost seamlessly, the best new hire will fit into the role, but this does not mean you should assume that good hiring practices eliminate the need for onboarding. While the need for onboarding and training is not eliminated by fully documented processes, documentation on how to do the job helps ensure that new hires follow the same process and deliver the same quality as experienced team members.

Onboarding should begin by trying to get them to work effectively on the first day. When they are ready, have all the equipment and their workspace. Set up as soon as possible all related IT accounts. Assign a mentor or trainer to walk them through business processes to get them up to speed as fast as possible. Make sure they are introduced as soon as possible to the rest of the team and make them feel like a team member. Make their role and responsibilities clear and explain who they can turn to for input on specific issues to the new hire. Set expectations for all involved. Touch with the new hire to address issues on a regular basis and see what they think.

Classify Employees Correctly

If you misclassify employees, your company may experience serious problems. If you classify employees as contractors, you may find it difficult to try to deny their benefits to people or be accused by HMRC of tax evasion. Instead, if you classify contractors as employees and then try to micromanage their work or tell them who they can’t work for later, you can create legal problems. Be very careful about classifications of employees that seem like an effort to avoid overtime payment.

Professional Distance Maintenance

Small companies feel like a family sometimes. For most of your working hours, you work with the same small group. Sometimes the owners promote a sense of proximity, because they think performance improves. This can encourage loyalty and enhance performance.

However, because of personal links, this can lead to favouritism and impair compliance. The solution consists of rules and a professional distance to be applied. To be a good manager, you don’t have to be cold and cruel. You can’t, however, be so close that you can’t repress someone for uncertain or illegal conduct or end someone for repeated offences. The distance from the profession also simplifies the firmness in the face of internal controversies.

Have an Employee Handbook – and Abide By It

The official policies of your company should contain an employee manual. How does the recruitment process work? How are increases or performance bonuses determined? What steps are taken to rebuke someone and fire them if necessary? What is acceptable and unacceptable at work behaviour? All this should be outlined in your employee manual and shared with new hire companies, so that they are aware of the rules.

The enforcement of these rules is equally important. In the treatment of everyone in accordance with the rules, your organization should be consistent. Update the employee’s manual and communicate changes to your staff when you issue new company policy. Business owners must realize that they lead primarily by example. It is also easier to comply with other rules when you follow your own rules.


Human resources are important in companies of every size, but SMEs can’t afford to mistake. Put the right foundation and create good policies now and you will help your company to grow.

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