For significant business success, you generally can’t go it alone. You need advisors, mentors, customers, suppliers and often, staff. However, a lot of business owners are terrified of taking on employees because of the additional challenges they bring.
At the end of the day, nothing stops an employee from bringing an employment tribunal against you, so you have to approach life as an employer with the view that you will always do the right thing and give yourself the best possible chance of winning in an employment tribunal should you be unfortunate enough to end up in one.
Employers are facing several HR challenges. Attracting and hiring the right people has always been difficult, but in recent years, many businesses are finding this even more of a struggle with AI increasingly used by applicants to write cover letters and CVs.
As a small business owner, you often need to compete with larger companies for top talent, so you need to think differently. They can take several approaches, but one which many companies are now using is to ‘hire for attitude and train in the skills you need’.
Key attributes commonly sought when hiring for attitude include: positivity and enthusiasm, adaptability and flexibility, team-oriented mindset, and resilience and problem-solving.
Once great employees are onboarded, retaining them is the next challenge. People need good salaries which they can afford to live on, but retention is much more than salaries. How the company treats employees, manages them, recognises them and rewards them is what will make them choose to stay.
Opportunities for career development and progression will also make people stay at the company, while flexible work hours are increasingly sought after by many employees, who will happily stay put for this over better pay.
Related: Self Assessment Tax Payments Now Processed via PAYE
Hybrid/remote working opportunities is another way to improve retention and will help the company stand out among larger corporations who are asking employees to return to the office.
Small business owners often lack the time or expertise to fully understand complex employment laws and regulations. This can lead to costly mistakes or legal issues. Making sure you have good quality HR advice which is specific to the company is essential.
Off-the-shelf documentation, policies and procedures are never going to be right for the business because they won’t reflect the company’s goals, values and culture. They will give the minimum legal requirements.
To ensure the company becomes and remains compliant with the ever-changing employment legislation, case law and best practice, as well as data protection laws, flexible working requests and the increasing use of AI in recruitment processes, make sure you have the best possible HR advisor supporting the business and let them do the heavy lifting on this one.
43% of UK businesses reported a cyber security breach or attack in 2024, representing a significant risk to employees’ records and payroll information.
Promoting a diverse and inclusive workplace can be challenging for small businesses, especially if they lack the resources to implement robust diversity initiatives or they have such small numbers of employees.
Being able to embed a philosophy of EDI in the workplace may be just what the business needs to tap into an additional pool of talent for recruitment purposes, to ensure loyalty for retention purposes and give opportunities to develop staff to their maximum potential.
As small businesses handle these challenges, it’s essential to consider the potential consequences of not addressing them. For instance, failing to provide opportunities for career development and progression can lead to decreased employee satisfaction and retention, ultimately affecting the business’s bottom line.
Related: Protecting Your Work from Theft
Many businesses have adopted remote work, which can present a range of HR challenges, from maintaining productivity and communication to supporting employee wellbeing.
As a business owner, you need to take an objective look at what the business needs and how it can be achieved. Would flexible or hybrid working be effective? Would it enable you to recruit and retain the right people? Would it increase employee engagement and productivity?
Ensuring the health and safety of employees is a concern for small businesses. Employers of all sizes have a legal duty to ensure a healthy and safe working environment.
This is both physical and psychological health and safety. This also extends to any time the employee is taking part in an activity because of their employment.
As small businesses grow, the demand for HR-related tasks increases, but there may not be sufficient resources to hire a dedicated HR professional. This can lead to the owner or other employees being stretched thin trying to manage HR tasks on top of their regular duties.
An HR system is a great place to start. There are hundreds of systems around today and some of them are easy to use, affordable and very time efficient, enabling you to comply with your legal obligations as well as manage your staff effectively.
Another option is to use an HR consultant as and when you need them. Just like engaging with any other supplier for your business, make sure they are experienced, qualified and really get you and your business.
