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Best HR practices for small businesses and startups


HR is a complicated, multifaceted job. It requires a thorough knowledge of employment law and regulations, as well as an understanding of human behaviour.

However, HR can be especially challenging for small businesses and startups because they lack the budget or resources to hire a dedicated HR professional or department.

Here are some best practices in Indian companies especially small businesses should follow in order to keep their employees happy and productive:

Develop a clear employee handbook

An employee handbook is an essential document that every small business needs to develop.

It contains all the policies and procedures of your workplace, and it can be used to help you better recruit, retain and manage employees.

The first step in creating your handbook is determining what information should be included. A sample table of contents might include:

  • Company mission statement
  • Policy on attendance/punctuality
  • Policy on conflicts with other employees or customers
  • The employee handbook should cover the entire employee life cycle from hiring to separation.

Develop a clear HR strategy

Before you can develop a clear HR strategy, you need to work out what your problem is. This might sound obvious, but many businesses fall into the trap of jumping straight into a solution without thinking about what they’re trying to solve.

Think about what your goals are from an HR perspective and how you could achieve them.

If there’s no clear vision or objective, then it’s likely that other practices will flounder or fail because they’re not being driven forward by someone who understands the bigger picture.

It’s also important not to worry too much about what other businesses’ strategies are—you should have your own goals and ambitions in mind without comparing yourself or competing with others.

You don’t want any kind of negative pressure coming from outside sources when setting yourself up for success!

Communicate effectively

Communication is the key to any successful business, whether you’re a small business or a startup.

It’s not enough just to hire employees and assume they know what you want them to do; instead, create an environment where everyone feels comfortable communicating with each other openly and honestly.

Use email as much as possible but don’t forget about the phone. Don’t assume that because someone can’t see you in person, they don’t care about your business.

If someone calls in sick or misses a meeting, follow up via text message—and be specific if they ask why!

Don’t think that just because your business has grown and expanded into multiple offices around the country means that communication will come naturally any more than it did when you first started out with one office and four employees: everyone needs clear and consistent guidelines on how best communicate with their fellow team members regardless of location or title (and make sure those guidelines include regular check-ins).

Foster a positive company culture

As you can see, company culture is important. It’s a reflection of your company’s values and its attitude toward employees.

While it may be tempting to hire someone who has the experience and qualifications you’re looking for, if their work ethic clashes with yours or that of your team, this could be detrimental to the overall success of your business.

The best way to foster a positive company culture is by hiring people who fit in with your mission statement.

For example, if you’re hoping to create an environment where everyone feels appreciated for their contributions no matter their role within the organization, then don’t hire someone whose idea of teamwork means receiving the credit without contributing anything themselves!

A good rule of thumb: if there’s something about an applicant that makes you feel uncomfortable or makes them seem like they’d be difficult to work with then stay away from bringing them on board!

Prioritize employee development

Employee development is a practice that allows you to keep your employees engaged and interested in their work.

It helps you retain talent, while also providing mutual benefits for both parties.

For example, if your company offers training programs or mentorship opportunities, then employees can use these opportunities to advance their skill sets and get better at what they do.

Similarly, employee development can help you improve business processes or introduce new technologies into the workplace so your organization can become more efficient and productive.

In order to prioritize employee development at your workplace, here are some tips:

  • Determine which employee tasks require additional training (this could include anything from developing new skill sets or expanding knowledge bases). Then identify candidates who are eligible for such programs/training sessions based on their previous experiences and skill sets. This way there won’t be any bottlenecks when it comes time for implementation since everyone knows exactly how much effort goes into each activity involved in getting something done successfully!

Manage performance effectively

  • Use performance management software to ensure you’re meeting the needs of your employees.
  • Create goals and track progress so you can see what’s working, and what isn’t.
  • Regularly survey employees to find out what they think about their work environment, company culture, etc.
  • Recognize great work in a public way with awards or celebrations that everyone can be part of.
  • Develop talent by creating employee development plans that focus on specific skillsets and areas of growth for each employee

Address conflicts and issues promptly

  • Address conflicts and issues promptly. Don’t let problems fester, or they will only get worse.
  • Don’t ignore problems until they become impossible to ignore. This may sound obvious, but it’s important to make sure you address the problem as soon as possible so that it doesn’t turn into a bigger issue later on.

Stay up to date with employment laws and regulations

Stay up to date with employment laws and regulations.

Research new laws and regulations, including those coming down the pipeline.

Find a lawyer who is qualified to advise you on these matters and also help you navigate them.

Use HR software

Using HR software will help you automate repetitive tasks and keep track of employee data. It can also help you manage benefits and performance reviews.

This is what the software industry calls “best practices” for a reason: They are proven to work in the real world, so there’s no reason to ignore them just because your company isn’t large enough to hire an HR manager yet.

Seek outside help

It’s important to know that HR is not just one person. It’s a department, made up of people with different skills and talents.

If you are looking for help with hiring practices or employee retention, consider speaking with an expert in those areas where you will get access to best HR practices.

That said, there are many benefits to having a dedicated HR team on your side including:

  • Establishing a relationship so they can understand what it’s like to work at your company
  • Providing data on compensation trends and best practices
  • Managing paperwork such as employee onboarding process and employee life cycle management.


HR is a complex and often challenging field. However, it can be made easier by following some simple guidelines.

The most important thing to remember is that there is no one-size-fits-all approach when it comes to human resources management (HRM).

Every business has its own unique challenges and needs from its HR team; therefore it’s important for you to know what works best for your company or organization before making any decisions about how things should be done moving forward.

If you’re looking for more information or assistance with any of these issues then please get in touch with us today!

Our team has years of experience working with small businesses and helping them to implement the best HR Practices by providing solutions that work best for each client without compromising quality service delivery or pricing.



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