8 Human Resources Tips for Small Business Entrepreneurs

Your small business’ operations depend on reliable staff delivering the service customers require and expect. Many entrepreneurs understand their product and their business model inside and out but know surprisingly little about managing employees. This too often leads to chaos in the workplace, insufficient staffing and, sometimes, unnecessary legal issues. Here are eight human resources tips for small business entrepreneurs.


Communicate Regularly

Communication is essential to the smooth operation of a business. This is especially so in Human Resources. Regular meetings to communicate business policies and seek feedback are necessary, but they’re only a start. You also need to have an open-door policy so that people can report issues before the next meeting or tell you matters they are not comfortable discussing in front of the team. Be open to listening to what others think. Conversely, it is a mistake to say that you have an open-door policy but discourage them from voicing opinions you disagree with.

Be as specific as possible when you’re dealing with HR issues. Be clear as to the duties you expect the new hire to take on. Outline the formal policies your employees are supposed to follow. Try to avoid grey areas in company policy since this can lead to confusion or double standards. Whether training new hires in company policy or giving your current staff training in new policies, be clear and concise as to what is required.

Another tactic is giving useful feedback throughout the year instead of waiting for the annual employee appraisal to tell them where they’re doing well and where they are falling short.

Stay Organised

Being organised is a vital component of Human Resources. You must stay organised. Prioritising tasks and getting in the habit of following up with queries each day helps you stay on top of everything. Prioritise each task according to how important it is, such as following up on resumes to arrange interviews for a new hire or addressing potential rule violations. And take the time every week to sort out your task list so that you don’t miss something important or waste time working on something that is no longer an issue. HR software can aid you in this process, but it is not a cure-all.

Know the Relevant Laws

A small business owner can’t know all the laws regarding Human Resources, but they need to know the major, most relevant ones. For example, you’re guaranteeing problems if you don’t know the minimum wage and legal standards for working conditions. Human Resources staff should be even more familiar with these laws. They should ensure that the company handbook is within compliance of the law as well as your employees’ actions. If you want to stay up to speed on the latest developments, you should consider getting a human resources qualification or take some basic HR courses. Sites like findcourses.co.uk have listed the many different courses that you can choose from depending on your level of expertise or which skill set you’d like to integrate.

Take Time to Hire the Right Person

For small business owners, an empty job means you’re losing money since small businesses almost never hire someone unless they truly need them. Gaps in the team create stress for everyone. Many business owners rush to fill these holes with the first person who appears qualified. However, this can be a mistake. You may hire someone who isn’t a fit with the company culture. You might select someone who doesn’t fit in with your team or the role they’re hired for. It is worth taking some extra time to make sure they’re a good fit for the job beyond qualifications and eligibility. And never rush the background checks and fail to verify someone’s qualifications.

Invest in Onboarding

The best new hire will fit into the role almost seamlessly, but this doesn’t mean you should assume good hiring practices eliminate the need for onboarding. Nor do fully documented processes eliminate the need for onboarding and training, although documentation on how to do the job helps ensure new hires follow the same process and deliver similar quality as the experienced team members.

Onboarding should start by trying to have everything in place for them to work effectively on day one. Have all equipment and their workspace ready when they are. Set up all related IT accounts as soon as possible. Assign a mentor or trainer to walk them through company processes, so that they get up to speed as quickly as possible. Ensure that they are introduced to the rest of the team as soon as possible and made to feel like a member of the team. Make it clear their role and responsibilities and explain to the new hire who they can turn to for input on specific issues. Set expectations for everyone involved. Touch base with the new hire periodically to address issues and see what they think.

Classify Employees Correctly

Your business can get into serious problems if you classify employees incorrectly. If you classify employees as contractors, you could get into trouble for trying to deny people their benefits or be accused of tax evasion by HMRC. Conversely, you can create legal problems if you classify contractors as employees and then try to micromanage their work or tell them who they cannot work for later. Be very careful of employee classifications that look like an effort to avoid paying overtime.

Maintain Professional Distance

Small businesses sometimes feel like a family. You’re working with the same small group for most of your working hours. Owners sometimes foster a sense of closeness because they think it improves performance. This can foster loyalty, and that may improve performance.

However, this can lead to favouritism due to personal ties and undermine enforcement of rules. The solution is to have rules and a professional distance so that you can enforce them. You don’t have to be cold and cruel to be a good manager. However, you can’t be so close that you can’t reprimand someone for unsafe or illegal behaviour or terminate someone for repeat infractions. The professional distance makes it easier to be firm in the face of internal disputes, as well.

Have an Employee Handbook – and Abide By It

An employee handbook should include your businesses’ formal policies. What is the process for hiring someone? What process is followed to determine raises or performance bonuses? What steps are followed when reprimanding someone and, if necessary, firing them? What constitutes acceptable and unacceptable behaviour in the workplace? Your employee handbook should outline all of this, and it should be shared with new hires so that they know the rules. Equally important is enforcing these rules. Your organisation should be consistent in its treatment of everyone in accordance with the rules. If you issue new company policies, update the employee handbook and communicate the changes to your staff.

Business owners need to understand that they lead first and foremost by example. When you follow your own rules, others will find it easier to abide by them, too.


Human Resources are important in businesses of all sizes, but small business entrepreneurs cannot afford to make a mistake. Lay the proper groundwork and establish good policies now and you’ll help your business to grow.

Author: Editorial Team

Share This Post On