Understanding small-business Human Resources Problems

Understanding small-business Human Resources Problems

AHEAD Human Resources Understanding small business HR Problems

A recent CFIB survey points to rapid economic growth as the cause of Human Resources problems in small businesses. Other key differences exist between the way small businesses and larger organizations handle hiring and human resources in the workplace. Small businesses may be doing too many things at once to focus on the job of HR management.

Human Resources problems of small businesses can be attributed to three things!

  1. Lack of formal human resources training. While bigger businesses have entire departments devoted to human resources, small-business owners must go through the process themselves. This is in addition to overseeing the day-to-day operations of the business itself. There just isn’t time, or perhaps money, to sit through a class to gain these skills.
  2. Inadequate time spent hiring. The nature of small business means sporadic hiring. Even with some kind of formal training, business owners are only likely to use it once or twice a year.
  3. Tendency to hire on instinct rather than through a formal method. Small-business owners tend to hire “People Like Us.” That is, they hire employees based on a feeling that the candidate is someone they can get along with. However, when the instincts backfire, they have to go through the whole hiring process all over again.
    In an ideal world, small-business owners would have a more professional or more rigorous way of recruiting, but it’s not an ideal world!

So how can a small business compete for quality employees, especially against larger organizations offering elaborate HR benefits? Attracting new hires may not require an expensive benefits package. In a recent Workopolis survey, skilled professionals were asked what they really wanted in a job.

Skilled Professions – top four priorities wanted in a job were:

  1. AHEAD Human Resources Green Bay WI Human Resources Problems of Small Businesses

    Enjoy their work

  2. Camaraderie with co-workers
  3. Desire to work for a company that has goals matching their own
  4. Potential for advancement

Surprised? Nary a benefit or bonus in sight. As for salary increases, respondents ranked that at fifth place. Contrary to popular myth, it doesn’t take a bigger pay check to attract better talent.

The good news is these priorities could be within the reach of the typical small business. Small businesses, with their less formal structures, are well-positioned to use more flexibility in their approach to HR issues. It is perhaps even better news that young soon-to-be professionals are already aware of the opportunities available through smaller companies.

On the flip side, however, young people are partial to working in the big cities. So Human Resources problems are likely to continue for small businesses outside urban areas.

Studies show companies that outsource their HR functions can save big-the typical small company saves an average of 25 hours per week, totaling over $18,000 in savings per year. Call us today at 920-436-9887 for a FREE consultation on how AHEAD can help you solve your Human Resources problems!

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