Every business is unique. For example, the daily hurdles faced by a massive enterprise like Amazon, started by Jeff Bezos and employing over 1.5 million people worldwide, are miles apart from what a small tech startup deals with. Large companies like Amazon have a team of HR experts and consultants to handle their needs, while small business owners often juggle hiring, payroll, and other HR duties on their own, without much support or expertise.
Even when small businesses manage the basics, they often encounter persistent challenges. What are the toughest HR issues they face? And how do successful small business leaders not just tackle these problems but also thrive despite them?
The key HR challenge small businesses often encounter is access to resources. Even when small businesses are aware of HR best practices and employer obligations, there can be a gap between knowing what to do and having the means to do it. Small businesses often lack the templates, processes, and legal resources that larger corporations enjoy. With sometimes only one person handling HR, creating an efficient and adaptable HR setup can feel nearly impossible.
Where should small businesses start to address this? Solutions like hiring more staff or buying expensive software aren’t usually feasible for them. It’s better for small HR teams to categorize and prioritize their efforts. A useful method is the COHR approach, which stands for compliance, operations, hiring, and retention.
Start with compliance, as it poses the highest risk, especially for smaller businesses that can’t afford big fines or legal battles. Most business owners aim to be ethical and legal in their practices regardless. Plus, compliance is crucial for attracting and keeping good employees, paving the way for growth.
After compliance, focus on HR operations, followed by hiring and retention. Managing pay, benefits, and training are fundamental HR tasks that demand time, effort, and resources. To ensure these efforts are worthwhile, you want to hire and keep outstanding employees. However, successful hiring and retention hinge on having strong compliance and operations in place first.
Even large companies find HR challenges demanding, but these become even more difficult for smaller businesses without easy access to modern HR resources or infrastructure for basic tasks. These challenges simply reflect the reality of running a small business today.
As a small business owner or manager, the best strategy to navigate HR complexities is by taking small, prioritized steps based on your business’s current stage.
Carly Holm is the founder and CEO of Humani HR, offering HR consulting and support to small and medium-sized businesses. Before starting Humani, Carly was a leader in the HR departments of CIBC and Bank of America.
