10 Worst Small Business HR Issues (And How to Solve Them) | 2018


Running a small business is not easy. You often have fewer resources available, yet the problems you have to deal with are the same big businesses are tackling with. One of the trickiest areas for small businesses is human resources. Below are some of the worst small business HR issues and tips on solving them – including with the clever use of small business HR software and appropriate training.


Employee conflict

Conflict cases between employees are naturally one the most obvious HR problems. People don’t always get along and disagreements can cause the work environment to suffer. It’s important to have an established channel for clearing employee conflict and to create a transparent communication channel for all employees. The more discussion there is between different members of the team, the less conflict you’ll have.

Discrimination and harassment

Harassment and discrimination cases are one of the most common HR problems. It’s been in the news lately, with big company bosses coming under fire – but it can happen to small businesses as well. To avoid this from blowing into something big, it’s important to create a culture of inclusion and diversity.

Not abiding by employment laws

As a small business owner, you probably don’t have a huge legal team to help you with HR issues. This can be a problem, especially when it comes to adhering to employment law. You might be unconsciously falling foul of abiding by workplace safety regulations and worker’s rights. It’s important to consider consulting with an employment lawyer or using free employee law resources online to fully understand the issue.

Hiring problems

Aside from problems within the team, your small business can also encounter problems in terms of hiring. When you are in the rush to hire a new candidate, it is possible to make a mistake – especially if you aren’t using an external recruitment agency. It’s important to consider outsourcing your recruitment needs or using appropriate small business HR software that helps you with candidate selection.

Wrong promotions

When you have a small pool of employees, finding the right promotions can become difficult. Just as you might end up hiring the wrong people, you might not have the time or resources to make the right promotions. It’s important to learn more about the skills that make a good manager – Harvard Business Review has a great article that can help you become better at picking the right people to promote.

High employee churn rate

Small businesses must work hard in order to keep employees happy. You simply can’t afford to lose your best people. This means you not only need a competitive pay and benefits package but also to keep the workplace motivating and inspiring. You should be in constant communication with your talent in order to find out what inspires them and how you can help them improve their skills and enjoy their work more.

Inadequate documentation

For small businesses, maintaining an adequate record of employee documentation can be a struggle, especially if you don’t have a big HR department (if any!). This can lead to potential problems and cause costly lawsuits down the line. You definitely want to invest in small business HR software that helps you understand what records to keep (benefit records, health insurance records, tax records, contract records).

Forgetting to review employee performance

Small businesses often fail to pay attention to reviewing and analysing employee performance. You might provide informal feedback but you don’t have an official review system in place. But it’s important to establish an official review system that quarterly or annually reviews employee performance and helps them achieve more – this will also guarantee you’re better able to create an employment package that’s competitive and reflects the true value the employee adds to your small business.

Inadequate social media training

Social media has become a key part of people’s lives and sometimes this can cause all sorts of PR disasters for companies. It’s important you don’t just pay attention to how your official business behaves on social media but how your employees do too. You can find a sample social media policy online and adjust it to fit your company’s needs.

Problems with payroll and benefits

You also need to be careful with issues arising from problems with payroll and benefits. You need to ensure you pay people on time and the right amount, as well as take care of their benefit payments and perks. It’s imperative to find small business HR software that helps you deal with this problem in the most efficient manner.

As the above shows, small businesses have to deal with many HR issues. But with adequate training, the use of free resources and the implementation of small business HR software, a small business can avoid the problems and succeed.


Bayzat Benefits is cloud based HR software for small business that help companies automate all their admin and HR work from data entry to managing employee records and many more.


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