Top 10 HR Tips for SMEs

a small business building with HR icon
Is your business growing? Explore these 10 HR tips for SMEs to strengthen your HR support for small businesses.

When it comes to HR tips for SMEs, you’d want to create more than a healthy workplace. You may just start your business and have only a handful of employees. 

Still, it doesn’t mean it’s okay for you to multitask — occasionally acting as a human resource and business owner. Having a great HR team creates a strong foundation that helps your business survive and grow.

If you’re one of the entrepreneurs or small business owners, I’ve compiled a checklist of top ten HR tips for you.

1. Be selective and hire the best employee

Hiring the best employee from the start is an important HR support for small businesses. One of the common mistakes that SMEs make is hiring too fast. They tend to fill up vacant roles hastily without thorough checking and consideration. 

It’s best to make sure that the candidates have the knowledge and experience to fulfil the job description before you decide to hire them. Remember, you can’t fire people as you please as they can sue you. 

On top of that, think of the cost you have to spend on hiring and training new employees. Hire the best employee to avoid a high turnover rate.

2. Comply with the labour law

an expert of labour law to give HR support to small business

To ensure a smooth hiring process, your HR team should understand and comply with the rules and regulations of the labour law. Not only does the law cover hiring aspects but also employees’ safety, benefits and compensation. 

If this is too challenging for you, consider hiring an expert to help your team get familiar with legal HR practices. Working with an expert is also a great HR support for small businesses. 

3. Establish a company culture

Another vital HR tips for SMEs is to build a strong company culture. How do you want your employees to feel, think and act when showing up to work? How do you want your customer to perceive your brand? Those questions can help you to think about your company culture. 

Company culture is best aligned with your behaviour and the products or services of your company. It’s crucial to establish company culture before you start hiring. This way, you can be sure the candidates are culturally fit for your organisation.

4. Create an employee handbook

Creating an employee handbook is a strong HR support for small businesses. An employee handbook or also known as an employee manual defines your company policies. 

Generally, the handbook contains detailed information such as:

  • The company’s vision and mission
  • Working hours
  • Dress code
  • Company benefits
  • Leave application 

No matter your company size, it’s inappropriate to share your company policies without your employees signing them. You need to create an employee handbook and send it along with the work contract to the candidates to sign. 

5. Keep HR documents properly

Many SMEs rely on paper and traditional methods to track attendance, manage schedules, onboard candidates, salary records and other HR activities. If your company is doing this, ensure all documents are organised and safely kept in lock drawers.

Entrepreneurs should note that this method is time-consuming and impractical. As the number of your employees grows in the future, it’s best to utilise HR software to store and share data. 

Thus, your HR team can focus on more important things. Going digital is by far one of the most essential HR tips for SMEs you should consider.

6. Pay salaries on time

HR practitioner paying salary on time

It would be best to clarify when salaries will be paid (for example, every 28th of the month). The same thing goes when stating deadlines for employees to submit their reimbursement claims.

Then, ensure that you include both in the company handbook and pay salaries on time. These practices also create a good impression of the HR team to all employees.

7. Ask for feedback

Being a small company has its own advantages. Due to the smaller number of workers, it’s easier to ask for feedback and meet everyone’s needs. 

That being said, do ask for feedback before you decide to use new software or announce new company benefits. Involve them in your decision-making so that employees know you care and their voices matter. Prioritising your employee is also a strong HR support for small businesses.

8. Conduct performance reviews

The performance of your employees will affect your business. Thus, it’s essential to conduct performance reviews to help employees improve and ensure that they’re meeting your expectations. 

Once candidates have signed the work contract, let them know the details of the performance review. For example, how many times it will be in a year, the reviews (verbal, written, combination), what determines high performers and so on. 

The HR team must ensure managers communicate what’s expected from the employees and give feedback regularly instead of withholding it until the performance review. Giving effective feedback is also great HR tips for SMEs to practice. 

9. Create a healthy work environment

It’s best to develop a healthy work environment since the inception of the business. It will be part of the company, embedded in the mind of your employees and an excellent HR support for small businesses. A healthy work environment should be holistic – good for the body, mind and soul. 

For example, HR can encourage work-life balance by leaving the office on time and creating a no-email or work chat policy after working hours. 

Conduct workshops about honesty, transparency and integrity in the workplace to build trust between employees. Create fun team building activities to establish deeper bonding between team members. 

10. Offer competitive salary and excellent benefits

offer interesting company benefit to attract talents in HR tips for SME

Great talents are aware of what they can contribute to the company and they don’t come at a low cost. If nobody applies for a job in your company or many candidates reject the offers after the interview, it could be you’re not offering a competitive salary. 

And no, please don’t use a bonus as an excuse. Keep in mind that salary is the number one factor that affects accepting a job offer. Another pull factor is by providing awesome company benefits, such as health insurance, transportation allowance, dental allowance, Netflix subscription, free snacks and so on.

To sum it all up

As a small business, it’s tempting to sacrifice the HR budget to focus more on developing your product or service. 

However, without a proper HR strategy and operation, you’re putting the performance and happiness of your employees at stake. In the long run, your company may experience little to no growth and a high turnover rate.

Now you know the top ten HR tips for SMEs. You can use this article as a checklist. Don’t have an HR team yet? Follow rule #1 — be selective and hire the best HR professionals. Better yet, check out this article to know more!

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