When you are running a small business, there are so many things to take care of from sales, marketing, product development, etc.and of course the very important task of trying to make a profit and stay in business.

Often human resources (HR) work slips down your priority list. Here we will discuss some very important HR basics that every small business should be aware of.

In this article, we will go through some basic HR functions that every small business owner should know about.

HR Basics for Every Business



  1. Hire the Best People

    The common business saying goes that you are only as good as the people you hire. No matter how good your business concept, your marketing, your planning and everything else is, it’s your employees who must put it all into practice. If you don’t have the right people designing your products and representing your company to your customers, you are in trouble.

Effective way of hiring is putting together a clear job description that sells the job, doesn’t unnecessarily exclude good candidates, and is posted in the right places. Next you will need to prepare properly for the interview, including knowing what to ask and what not to ask, and put together a competitive pay package for your chosen candidate.


  1. Get New Staff Up to Speed Quickly

    Once you have hired the right people,the last thing you want to do is lose them. But this is what may happen if you don’t have the right onboarding training. Just when you are starting out, you can train the first few new employees yourself. But as soon as you grow beyond a few members of staff, you will need to create a formal orientation training plan that includes following things at a minimum:

    an introduction to the company’s history and values
    All information about pay, benefits, company policies, vacation time, etc.
    the business structure and key people
    who your customers are and what they want
    Behavior that is expected from employees
    processes and software that new employees will need to learn


  1. Offer Competitive Pay and Benefits

    To keep up with the changing market and your employees’ constantly improving range of skills and experience, compensation benchmarking is needed.Offering attractive benefits like health insurance, parental leave and retirement plans can also help recruit talented people and convince them to stay longer.

  2. Keep Your Employees Safe

    Clearly your employees’ safety is your most important responsibility. So it’s important for you to assess the risks, put controls in place and ensure that everyone follows the safety rules.


  1. Have Clear Employment Policies

    Small businesses are often run very informally, which sometimes can be a strength. But on the flip side, it can also lead to confusion, inefficiency, loss of productivity, and sometimes potential legal problems. So, take out time to create an employee handbook with clear documentation.

  2. Measure Employee Performance

    After hiring a great team, it is important to review their performance. Performance reviews are very helpful to the employees as well, as it establishes clear goals and expectations and lets them know how they are doing.

  3. Communicate Clearly

    Good communication is at the key to any successful business. Small businesses have a clear advantage here as i’s much easier to communicate with a few dozen employees than a few thousand. Think about the best ways to keep people informed, communicate the company’s values, get feedback from staff, and more.

  4. Provide Effective Training

    Training is a consistent requirement. If you want to stay ahead of the curve in an evolving and competitive marketplace, you will need well-trained employees who are constantly learning new skills. Good training can be a powerful tool for improving employee satisfaction and retention.

    While traditional corporate training programs can be expensive, there are plenty of free or low-cost alternatives. You have to read more about them, along with details of how to put together individual training plans for each employee.


  1. Keep Your Staff Happy and Improve Retention

    It is worth paying attention to this area and tracking your staff turnover rate. High turnover ratio is always costly for your business, not just because of the cost of hiring and training replacements, but also because of the lost knowledge and expertise that departing employees take with them. It is equally disastrous for the staff morale to see people quitting all the time.


  1. Resolve Conflicts

    In a large company, when conflicts arise between employees, they are typically handled by managers and then passed to the HR Executive Search Firms department if they become more serious and intractable.
    Resolve all employee conflicts in an efficient manner.


  1. Be Efficient With Payroll and Other Paperwork

    Everybody loves to get paid on time. Running payroll effectively is easy, especially if you use good software to help you. But it’s still possible to make mistakes. You can lose you employee’s trust being late with their paycheck.

    You also need to make sure you have deducted the right amount of tax and filed the appropriate forms with the tax authorities. So as a business owner,it’s very important that you get the payroll done properly.


  1. Handle the Termination Process

    If everything is good, your employees should be happier and more productive in their jobs, and fewer of them will want to quit. But still, no matter what you do, at some point you will have to handle the situation of an employee wanting to quit—or sometimes, you’ll need to fire someone for poor performance.

    From ensuring a smooth handover to covering your legal bases, there’s a lot of job to do. You will also want to run an exit interview to make sure you know what went wrong and how you can improve things to avoid similar situations in future.


Author Bio: 

Kyra is a Hiring Director at Alliance Recruitment Agency – an IT Recruitment Agency. She specializes in helping with international recruiting, staffing, Virtual Receptionist, HR services and Careers advice service for overseas and international businesses.

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