5 biggest challenges facing small business HR staff

5 biggest challenges facing small business HR staff


“A competent and trustworthy adviser can be an HR department of one’s best friend,” Jennifer Currence of consultancy OnCore Management explains. Since these single employees are tasked with so many different important duties, “it is difficult to ensure excellence without some help,” she adds. “Because of this, strong and sustained customer service will go a long way,…as this will reduce the amount of time (the HR person) has to spend on tasks and allows him or her to spend on strategic initiatives for the organization.” In a presentation at SHRM’s annual conference in Washington recently, Currence shared results of a survey she conducted that explain the top concerns of an HR department of one.

5) Relationship management (46%)

One survey respondent said an HR department of one serves as a “therapist role for management.” Small businesses have the culture where, “HR is supposed to wave a magic wand and fix a company’s culture,” Currence said. “But we know the real culture comes from the top.”

People just want to be listened to and need a place to vent, she added. “In HR, we tend to be those people.”

4) Talent acquisition and retention (47%)

HR is worrying about what millennials are thinking about in regards to loyalty and staying with their employer. “People ask, ‘What can you for me?,” Currence said. “This is happening because of the labor market. National unemployment was 4.7% in May, the lowest in nine years.”

The low unemployment rate, she explained, means more competition for good jobs and fighting against for top-notch professionals.

3) Employee engagement (48%)

Our survey respondent said they had a significant turnover rate, despite a high employee engagement score. Currence explained that high employee engagement reduces turnover. However, if a company has high turnover anyway, high engagement can reduce that by up to 25%. Engagement is affected by poor leadership, pay and flexibility and, in small businesses especially, career advancement, she added.

2) Employment law(49%)

New regulations around the Family & Medical Leave Act and the Affordable Care Act are keeping HR busy, Currence said. One respondent said, “HR is solely responsible for compliance, but senior managers don’t care about it until there is an issue.” To help HR, Currence suggested updating employee handbooks and having frequent training

1) Leadership and navigation (54%)

This is the top priority for a small HR Department, with one survey respondent asking, “How do I lead when I have so much to do?  I am concerned because I am not involved in the strategy of the business, because I am the HR person for 40 employees.”

Traditional HR needs one person for every 100-125 employees, Currence said, but that is not the case at many small businesses. “The biggest hurdle…is the correlation between HR and management, because everyone feels they know more about HR than HR and recommendation made by HR go unheard, unappreciated and overlooked,” she said.