In small businesses, a well-functioning HR department can make a huge difference to productivity and company culture. However, not all businesses understand how best to use their HR teams to make the most of their workplace boosting capabilities. Running a small business is always going to involve overcoming HR hurdles, so let’s discover 3 common HR challenges and some potential solutions to these issues.

Managing Performance and Personal Development

Understanding how to measure performance and develop staff are two of the largest challenges facing small businesses today. By ensuring activities and outputs meet the goals of the company, HR leaders in small businesses must focus on the performance of the organisation as a whole, any departmental achievements, all employee goals, and the processes in place to manage tasks. Outcomes must be specified, and feedback and coaching should be provided so that actual performances can be compared to desired achievements.

In small businesses, performance management and personal development can be enhanced through the use of HR software and platforms such as Zenefits. Determining How to find the right HR software company is no easy task however, and companies must take into consideration exactly how employee performance management could be enhanced through the use of tools for goal setting, performance reviews, and one-on-one meetings. Keeping employees focused involves providing constructive feedback and keeping all levels of an organisation in sync, and therefore HR software can be used to coordinate these aims.

Career Development Opportunities

In order to retain the best people for the job, small businesses need to provide adequate support and training. Regular training should form an integral part of the employment journey and so opportunities should be sought and set out for all members of staff. The growth and development needs of employees are identified as crucial factors to retention rates and so options for career progression must be discussed on a regular basis.

One way to promote career development opportunities is using in-house coaching and mentoring schemes. Mentors can offer valuable insights to employees that can have a positive impact on a business. In small businesses, this involves pairing mentors and mentees to transfer knowledge, skills, and abilities in regular and interactive mentoring sessions. As the program progresses human resources teams should gather feedback to ensure employees have the tools and resources needed and that the experience meets their expectations so that modifications can be made if necessary.


Vetting candidates and attracting the right people for a job role is a huge responsibility that HR departments in small businesses should devote significant amounts of time towards. Did you know that recruitment issues are frequently cited as one of the top barriers preventing businesses from growing more quickly? In an ideal world, employees would arrive at a company fully equipped with the skills needed to for the job, but in the overwhelming majority of cases, this is simply not possible.

HR departments must therefore be invested in the recruitment process and can enhance the hiring experience by compiling strategies to find the best talent. This could include developing flexible work schedules, cultivating a positive corporate culture, and communicating across company levels to identify qualities and qualifications required from recruits. Finally, small businesses have a sense of intimacy and flexibility that can work in their favour by creating an appealing work environment. HR teams should utilise these strengths as a way of attracting skilled employees who are a perfect fit for the company.

Overcoming HR challenges involves a great deal of foresight and innovative thinking. However, through developing unique solutions to common problems, small businesses can thrive, creating a positive working environment, and ensuring your company stands out from the competition.

Retaining the best employees is a major concern for small businesses. Take a look at this blog post for a brief overview of employee retention strategies.

By Chakraborty

Dr Chakrabarty is the Chief Innovation Officer of IntuiComp TeraScience. Earlier she was Assistant Professor of Delhi University, a QS ranked university in India. Before that she has held research positions in IIT Mumbai, IIT Chennai and IISc Bangalore. She holds 2 patents and over 20 research publications in her name which are highly cited. Her area of research is in smart technologies, integrated devices and communications. She also has a penchant for blogging and is an editor of Business Fundas.