Fundamental HR Management for Smaller Businesses

Robert PorterSmall Business Advising And Mentoring, Small Business Resources

small business hr management

You went into business because of a passion for a product or a service and built a business around that. At some point, you hired your first employee and soon discovered HR management is a necessary part of a successful business. Your success is now partially dependent upon your employees, their performance, and how they interact with your customers. 

Hire the Right People for the Job

Hiring the right person takes time, and the right person on a small team is critical. You’ve invested in your business and it’s equally important you invest the time to do the following:

  1. Reevaluate your business – What does your business need to be truly successful? Resist the temptation to react to an immediate issue. Instead, think about the skills your business will need not only today but next quarter, and perhaps even next year. How will that affect your staffing needs, the skillsets, and the experience levels you hire for?
  2. Now, create a clear job definition. If you can’t clearly define the job, how can you know what skillsets you are hiring for? To be sure you are making the right hire, and that the right people apply, you must understand the skills, training, and education that meet your needs.
  3. Check references. Take the time — it’s important. Hiring is a big decision, and you should use all the tools available to make an informed decision.

Create an Employee Development Plan

Both you and your new hire want to see success, so plan for that success to happen. Once again invest the time to do the following:

  1. Schedule benchmarks and timelines. You are probably doing this for your customers and/or in your business to some degree already, with delivery timelines, so do the same with your associates. You both want success, so define what and when success looks like.
  2. Let them know who and what their resources for success will be. In short, provide your employees with the knowledge and tools to be successful, whether it’s a course, a mentor, or even a book.
  3. Reassure them that you understand success may take time. New associates, even seasoned ones, will need time to understand the culture, understand procedures, and develop efficiencies.

Position Employees for Success with an Ongoing Needs Assessment Process

Employees want meaningful feedback. In study after study, employees want to know how they are doing, what they are doing well, and how they could provide more value to your company. Providing consistent and constructive feedback opens the door to a positive work environment. Along those same lines, it’s important to address and document performance issues. It’s a difficult topic and it’s easy to avoid, but avoiding it won’t make the issues go away. When issues arise, document them, the conversations, and any other relevant information. The documentation will make it easy to keep track of events and timelines, and if further action is required, you’ll have the information readily available.

Engage Employees

Take time to engage your employees. Let them know what is happening in the business and how they are contributing. Many articles have been written on the benefits of transparency and its effect on the level of trust within businesses, which in turn can lead to higher productivity and therefore lower costs.

If things are going well, share the success. Everyone likes to feel as if they are on a winning team. Employees spend a third of the day at work and want to feel as if they are spending their time well. Celebrate online reviews, customer comments, reaching goals, verbally praise great work, etc. Foster a winning culture by celebrating all the wins.

If things aren’t going well, it may well be appropriate to engage the team in conversation. What do they see? What ideas & suggestions do they have? Chances are they are interacting with your customers more often and they may have insights you aren’t aware of. When opening this discussion, you must be open to constructive criticism and be an active participant.  Ideally you want to you employees to feel empowered to suggest ways your business might improve.


The average small business owner is not a born HR manager so it’s OK to seek out help with hiring, offering benefits, and engaging employees. Resources like are great for that – and free!