It might not seem important to worry about human resources (HR) as a small business. After all, what can go wrong on a small team? But your people are your greatest asset, and even if your workforce is lean, there are HR challenges that can harm your company if you don’t know how to handle them. Check out some common HR pitfalls small business owners face and the cost-saving solutions you can use to address them.

  1. Securing great talent with a tight budget. You don’t have to break the bank to compete with larger organizations. Leverage your networks, create a referral program for existing staff, or up your social media game. Once your employment branding is on track, review your total compensation package. Perks like hybrid work or flexible scheduling can matter to some candidates just as much as salary. Don’t forget to consider internal talent. Sometimes the answer you’re looking for is right under your nose.
  2. Employee training and development. Training employees might seem expensive, but it’s one area where your investment can really pay off. Upskilling your workforce gives you built-in candidates for your hard-to-fill roles and succession plans. Skills-based training can help you improve overall productivity, and leadership training can help you increase your management competency. Both can boost retention by engaging employees.
  3. Retention. You’ve got great people. How do you keep them? Showing recognition is an affordable retention strategy for any business. When the team is small, reminding them of the critical role they play in your success can mean a lot. Offering praise at a company meeting, handing out a few small gift cards, or taking the time to thank employees can make them feel appreciated and valued. When employees feel valued, they’re more likely to be invested in the work they do.[1] When people do leave, conduct a quick exit interview to find opportunities to improve.
  4. Mental health in the workplace. Wellness is a key component of employee engagement. Happy employees work twice as effectively, energetically, and creatively, and greater employee wellbeing correlates with better profits and retention.[2] Psychological safety has received increasing attention in the HR space; it’s the sense that it’s safe to disagree, deliver challenging or bad news, or speak out against something.[3] Make sure your employees have training on mental health and that you create opportunities for staff to share their ideas and thoughts—both good and bad. This can be as simple as asking them what they think, genuinely listening, and considering their response. Creating space to be heard without repercussions can go a long way towards building a mentally healthy workplace.
  5. Cybersecurity. More than half (62%) of small and medium-sized business owners think their company is too small to be targeted by cybercrime, yet one quarter of employees in these businesses feel ill-equipped to identify cybersecurity threats.[4]  Most cybersecurity incidents happen when an employee accidently grants an unauthorized user access to the company’s network, often through a phishing attempt. With one wrong click, you could be locked out of your network and forced to shut down until everything is resolved. Employee training is the best approach to ward off cybercriminals. If in doubt, engage a professional to help keep you secure.
  6. Managing costs and budgets. To optimize your budget, focus on efficiency and growth. Prioritize capital investments, and regularly review your expenses to ensure you’re working with the most cost-effective vendors. Streamline processes, automating what you can and leveraging technology, including AI. Automation and technology can play a powerful role in supporting your HR tasks. Digital employee management, training, and recordkeeping, for example, can save you hours, especially if you’re ever audited or inspected.
  7. Diversity, equity, inclusion, and belonging (DEIB). Whether managing a diverse workforce or navigating the world of temporary foreign workers, making sure your employees feel comfortable bringing their true selves to work is critical to retention, morale, and trust. Consider training your employees on respect in the workplace and your DEIB initiatives so you can build a workplace people want to join and remain at for years.
  8. Dealing with employees behaving badly. Bad behaviour in the workplace can have a ripple effect. If it’s ignored, others might think the behaviour is acceptable. But if your response is too harsh, you can tarnish morale and even your reputation. Take attendance, for example. If employees don’t follow call-in procedures, things can easily get out of hand, leaving you understaffed and scrambling. Get ahead of this by ensuring your expectations are clear from the start. Keep your progressive discipline policy, attendance policy, and other policies up to date. Then, follow your policies consistently when there’s an issue. This helps keep reprimands fair and gives you a clear escalation process if employees don’t change their ways.
  9. Terminations. Sometimes, despite your best efforts, terminating an employee is the only option. In most cases, terminations are with notice. To make the process go as smoothly as possible, research or seek advice about what the employee is owed and whether you should exceed that amount. Next, prepare the paperwork and your speaking notes, deliver the message with empathy, and provide the former employee with the relevant documentation so they can move on. Be sure to tie up loose ends like collecting all your equipment, and remind your former employee of their confidentiality obligations to protect your business information.
  10. Staying up to date and compliant. The world of HR is evolving as rapidly as ever, and the legislative landscape is always changing. Last year alone, we provided our clients with over 900 legislative and HR updates. The key to staying on top of compliance requirements is automation. Sign up for e-mail subscriptions, like the government websites in your area, to stay up to date on important changes in legislation and employment law.

Managing a small business is difficult, but with the right tools and strategies, tackling HR challenges doesn’t have to be. Get the most out of your employees by following these tips, and free up your time so you can focus on growing your business.

Explore EZBenefits for your small business

When it comes to attracting and retaining talent, an affordable, sustainable and easily managed group benefits plan can also be a big help. Equitable knows that you’re competing with larger organizations that have big budgets and lots of resources. Explore EZBenefits™  by Equitable. It’s a unique group benefits solution specifically designed for small businesses. EZBenefits includes a mix of Life, Health and Dental coverage as well as extra HR support through Citation Canada.

Courtesy of Citation Canada. Citation Canada is a proud partner of Equitable.

 

[1] Grant, Adam M., and Francesca Gino, “A Little Thanks Goes a Long Way: Explaining Why Gratitude Expressions Motivate Prosocial Behavior,” Journal of Personality and Social Psychology 98, no. 6 (2010). https://www.umkc.edu/facultyombuds/documents/grant_gino_jpsp_2010.pdf (accessed August 27, 2024).

[2] Indeed, “Canada Work Wellbeing 2023 Report: How Thriving People Create Thriving Companies,” 2023. Retrieved from: https://offers.indeed.com/CA_en_2023_WorkWellbeing2023Report_CON-EBOOK.html (accessed August 27, 2024).

[3] Gallo, Amy, “What Is Psychological Safety?” Harvard Business Review, February 15, 2023. https://hbr.org/2023/02/what-is-psychological-safety (accessed August 27, 2024).

[4] McGuinty, Liam, “Are you cyber savvy? IBC’s research suggests business owners and employees could be putting their organizations at risk.” Insurance Bureau of Canada, November 6, 2023. https://www.ibc.ca/news-insights/in-focus/ibcs-research-suggests-business-owners-and-employees-could-be-putting-their-organizations-at-risk (accessed August 27, 2024).