Good practice in HR for small businesses

Good practice in HR for small businesses (1-15 Staff)

In my mind I split the different elements of a business into two sections, revenue generating and non-revenue generating. It won’t shock you that the non-generating elements don’t excite me nearly as much and Human Resources (HR) is a big part of that. Regardless of my personal taste this is not an area any business owner should take lightly and without due attention can end up costing you valuable time and money.


Notes on what makes a good HR manager


  • Recruitment should never be fire-fighting, make sure your manager is forward planning when searching for and hiring new staff
  • Poor or non-existent induction of staff results in trouble further down the road.  An HR manager will share this opinion and be consistent with all short-term and long-term training
  • They will be experienced and efficient managing a cost centre or planning a staff budget
  • They will stay abreast of your staffs’ absence levels will actively manage sickness
  • Bold communicators will push issues with difficult staff but remain fair and understanding
  • Whilst acknowledging the business objectives and culture an HR manager will understand that a successful business needs happy staff
  • They should be up to date with employment law!
  • All going well a great HR manager will increase your staff retention and development, decrease absence, improve morale and promote an open and fair work environment.


Many advisors will tell you that HR is clear cut.  I would disagree here and tell you that HR is a grey area and the law is down to interpretation of the circumstances that surround the issues. With all of the government changes to employment law it can be tough to keep up to date while running a business through challenging times so this is where I hope to help. Having owned a HR support company I want to give you some concise, no nonsense advice to the does and don’ts of HR. It is impossible for me to cover every point but without knowing the important parts you can’t focus on generating revenue!

The majority of the HR related SOS calls I get are from micro business owners who ignore an HR issue or put it on the back burner until something goes wrong. You may only have a small team but that doesn’t mean you don’t have to comply with employment law. It’s probably not commercially viable for you to staff a permanent HR position at this stage so do the basics when you commence with a new employee, create the right culture, always pay them on time and you should be fine.

Set the culture

Your work practice is set by example, by you, as the boss. If you have a culture where basic standards aren’t adhered to and staff issues are not addressed you will cause your very own HRnightmare. Open and direct communication and proactive problem solving are the only way to deal with HR issues. Most problems simply won’t occur if your staff have the chance to express problems or if you raise them yourself in good time. A good boss needs to be fair, consistent and honest to create a healthy culture and to address those staff that aren’t working with the same ethic.


Legally you have to provide a contract of employment to each member of staff within two months of their start date. Always ensure you have a six month probationary period written into the contract which allows you to sanity check their performance and terminate the agreement if they are not performing. It is crucial that you issue this contract within the time period because if at a later date there are issues with the employee, a tribunal can rule against you based on this.

Regular one to one meetings


Good Advice:

  • If you are approachable and open this will ensure that a member of staff can come to you at an early stage with any problem.
  • There are legal guidelines to deal with every HR issue but you have to add in the human element of emotion. 90% of HR issues brought forward by a member of staff are to do with emotional factors which can be avoided if dealt with promptly but not cured by HR law.
  • As a small business owner you need to use every resource that is available to you. HR is a grey area so it’s important you gain impartial expert advice.
  • Make sure you keep up to your end of any agreement – simply put, make sure you pay your staff on time!
  • If I’m ever unsure about an employee’s rights and I need an immediate answer I call ACAS who act for employers and employees to offer impartial advice.








Regular communication with your staff is crucial but only if it’s productive. Many HR issues will fester and grow when they are not discussed or addressed. Whether its addressing lateness, sickness or poor performance, the only way to stop an issue growing is to nip it in the bud and holding regular one to one meetings will achieve this. The meetings do not have to be long but you should always make notes and agree action points. Prepare for the meeting by writing the points you want to discuss and always begin by asking the member of staff how they are or how they think they are getting on. This will give you the steer on whether or not they are aware of a problem. Ensure all your points are discussed and question the member of staff on why the issue is happening.

Disciplinary and Tribunals

My rule of thumb about employment tribunals is to simply not get to this point because by then both parties have already lost.

The member of staff has lost because they have lost their job and you have lost because the time, money and stress you will go through are not worth the hassle or the battle.All disciplinary actions other than gross misconduct can be avoided through good communication and management as no boss or member of staff really wants to go through one. A disciplinary normally results because of three things, either poor performance, capability or mainly an issue relating to an attitude problem.

Performance and capability issues can be addressed and solved by good communication, factual evidence, training and action plans. Attitude issues can be addressed within good management of the probation period, open communication (dealt with on the spot if an example is observed), regular meetings and honest factual conversations pointing out the bad attitude.