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Human Resource Management issues in small businesses

Human resource management is the process of hiring, motivating and retaining employees. It involves the tasks of developing a strategic human resource plan that includes objectives, goals and strategies. The HR department needs to ensure that their company is equipped with all the necessary resources so that they can meet their business objectives efficiently and effectively. In this article we will discuss some of the common issues faced by small businesses when it comes to human resource management issues:

Not able to attract and hire the best talent

You may not be able to hire the best talents, because the small business is not able to pay high salaries. Small businesses do not have a good reputation and brand name, so they do not have any image or corporate culture. The abundance of talent in the market is a huge challenge for small business owners, who are often forced to hire employees most of the time who are not the right fit as they have to compromise due to budget or many times inability to attract the best talent.

HR Processes are not defined

HR Processes are not defined clearly enough in most small businesses. If a process is not documented, it cannot be tracked and measured. Without a defined process that guides employees through the hiring process, interviewing candidates and making hiring decisions, your organization will lack direction and consistency in its approach to hiring top talent.

In order for the right decision-making process to work efficiently and effectively throughout all phases—from attracting potential candidates to onboarding new hires—you must first create clear guidelines around the steps involved with each stage in order to ensure consistency among them. In the absence of document policy informal culture gets established which is very difficult to change.

Unavailability of dedicated HR Resource

It is not surprising to see that HR is not a core function of the business in most small businesses. In fact, it’s one of the highest-cost centres and has been identified as a key driver of growth by many companies in India. However, despite being such an important part of your company’s success, you may find yourself wondering whether or not you have enough resources dedicated to this area.

Unavailability of dedicated resources makes it difficult for companies who struggle underperforming due diligence efforts because there wasn’t enough time allocated into making sure everyone understands exactly how they should behave while working together toward reaching common goals.”

Ignoring the Need for building Leadership pipeline

Leadership development is a key component of any small business. The role of leadership in your company is vital to its success, and it’s critical that you develop leaders who can take on this responsibility. Leadership development helps ensure that businesses are successful by giving them the tools they need to operate effectively as well as making sure everyone understands their roles within the organization.


As a small business, you’re more likely to have an HR department that doesn’t have the resources who can handle all of your human resources needs. In Most small businesses founders ends up managing HR due to cost constraint and that takes away lot of time of founders and does not allow them to focus on their core business. If you are a small business and do not have a dedicated HR department, Emgage will help you to set up and manager your complete HR department. For free consultation, set up a call with our HR experts today.



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