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7 Ways HR for Small Business is Different from HR for Big Business



Small business HR teams have different priorities and resources than large businesses. But these differences can actually offer fantastic opportunities.

HR, or human resources, is the domain of a business designed to take care of the well-being of employees. This can range from hiring and recruiting to training and benefits.

The basic principles behind HR remain the same regardless of the size of the company. However, small businesses are uniquely positioned to provide personalized service to their staff that caters to the individual. In this guide, we explain some key differences and offer HR tips for small businesses to motivate employees and benefit your business.

1. Small Business HR Can Be Creative With Limited Resources

One of the main challenges you will face is limited resources. You probably won’t be able to employ entire teams of HR professionals to support employees, or spend money on fixing issues when they arise.

However, this is not necessarily a downside. A smaller, dedicated HR team – or even a single HR person who knows each member of the workforce personally – has an immediate advantage over even the most experienced professional.

In small businesses, it is likely that access to benefits such as organized training courses, team building or mentoring programs. However, in companies with only a handful of employees, there are plenty of opportunities to get creative when overseeing HR for small businesses.

  • It may be possible to introduce third-party providers for certain areas of training, which may bring new ideas and skills to the workplace.
  • Job shadowing is easier in a smaller environment, allowing new members of the workforce to experience all aspects of the role.
  • Small businesses also have less bureaucracy to manage, which means training programs can be launched almost instantly.

2. You can use support tools when hiring top talent

Small business owners often feel like they don’t have enough brand recognition to be able to recruit top talent.

However, this is not necessarily the case. Many of the best people are looking for roles that allow them some personal freedom to be creative, or a company that will look after their interests while paying them a realistic salary.

  • External pre-employment assessment tools can help small businesses find the most suitable candidates for the job. These tools can also assess the compatibility between the candidate and the position.
  • Some even offer fully personalized assessment tests, which helps build a pool of candidates before the interview stage.
  • There are also a range of supportive recruiting resources that you can use.

3. Employees can help shape HR policies

One area where small businesses have a distinct advantage over their larger counterparts is employee retention.

Small businesses are often better able to understand the needs of each employee and can therefore serve them better in the long run.

In companies where there are only a handful of employees, the majority of the staff will be able to participate in the orientation of HR policies. This can help ensure that they get everything they need to hire them and have them work for the same company for many years to come.

4. No budget means spreading the load

Not having the resources of a large HR team can seem like a downside, but there are multiple benefits when it comes to taking care of employee well-being.

One of the best things about working for a small business is the many opportunities that there are for employees to experience all aspects of the business.

  • HR can be combined with other aspects of running the business to create a unique, challenging and fulfilling role.
  • For example, the owner may handle annual reviews and salary recommendations, while a member of the sales team may be particularly skilled in managing employee well-being.
  • Small business HR means calling on many members of the business to work together. The budget issue doesn’t seem so important when a team supports each other to improve the well-being of those in the business at large.

5. HR for Small Business Means Working With Individuals on a Personal Level

One of the main responsibilities of any HR team is to communicate effectively with employees. In a large enterprise, systems and processes will be in place to ensure that this happens.

With the HR policy for small businesses, everything can be much more individual. It is less about procedure than understanding the needs of each employee on a personal level.

New employees can be fully informed about company policies, while sharing their ideas on how to improve the workplace for everyone.

  • Statistics show that about 75% of all employees are more likely to stay with an organization that is ready to listen to them when they have concerns and take action to address them effectively.
  • Employees who are not engaged with the company they work for are twice as likely to seek new employment as those who think they can engage with their employers.

Companies that invest in creating a strong candidate experience will typically see the quality of their recruitments increase by around 70%. These figures are valid for large and small businesses.

6. Training and development are managed internally

Formal training opportunities may be reduced within a small business, but this does not completely prevent talent development.

The opportunities to get involved in many aspects of the business create unique growth avenues – a benefit for the employee and the company.

Individuals can learn from others on the job, ensuring that training is relevant to the values ​​and mission of the company, while saving money.

Developing new skills within the existing workforce also presents employees with new challenges and helps the business grow where it needs to be.

7. Benefits are always on the table

Conducting a benefit analysis is much easier in a small business, where the needs of only a handful of employees need to be considered. Providing personal benefits doesn’t have to cost the company a lot of money.

In fact, many of the benefits that employees seek will actually be inexpensive or even free. The Harvard Business Review found that some of the most sought-after benefits include flexible work, more vacations, and the ability to work from home.

With HR in small businesses, there is also a unique opportunity to ask employees what they might want, with a view to delivering benefits that work for everyone. Becoming a Groupon merchant can help small businesses expand their customer base. Attract new prospects and get support and advice today.


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