HR For Small Business

So you've decided to start (or you already run) your own small business. Taking the plunge is a brave step and one that comes with its own unique set of challenges that can be overwhelming, especially for first-timers. Besides developing a fool-proof business plan and steering the ship, you’ll have to appoint and manage other individuals, if you're planning on expanding beyond a one person operation.

With this in mind, you’ll need to be up-to-date and familiar with employment law. This becomes more complex when employing foreign nationals as you'll have to be able to navigate the post-Brexit employment landscape. Which if you're unfamiliar with them can be daunting. However, it's worth setting the groundwork for HR services, even if you are a small business operation.

If you're just starting out on your small business journey then talk to the HR experts at Croner. With over 80 years of supporting businesses, we can advise you on everything from staffing advice to creating workplace policies to enhance productivity and improve workplace culture.  Get in touch with our experts on 0800 124 4973.

Consider outsourced HR services and other solutions

As a business owner you're more than likely kept busy with the day to day running of your business, so hiring a HR team is probably not going to be first on the agenda when it comes to any new role hires. In fact, until you have few individuals employed it might not even cross your mind at all, and an in-house team at this stage of the venture is probably unnecessary.

However, getting HR wrong can land your business in hot water. Employment tribunals for instances of wrongful dismissal and discrimination can easily fall in your lap if you are unfamiliar with certain processes and this can be costly not just in reputation but also in monetary terms.

Research and keep up to date with your target market for legal compliance

Before you even created a business plan you did some research on the market you planned to enter. This won't have just helped you understand the competition you'll be up against and help you zero in on your core audience but also helped you understand a bit more about the regulatory landscape and the legal framework of the industry.

Having said that, the intricacies of legislation can sometimes be missed especially if there are updates to these, that seemingly come out of nowhere. Making sure you keep up to date with any major industry changes, is a good way to help avoid any potentially costly legal issues.

Ensure your business plan is geared for success

Getting the business plan ironed out and making sure you are clear on your goals as a business is the first step to ensuring your business is on the right track. Be sure to outline strategies and financial projections. This should also include a marketing plan that should aim to promote your business, and highlight how you plan to reach your target audience.

Below are some of the things you should take into consideration when creating a new (or adjusting a current) business plan.

Create clear company policies

Strong policies can ensure that your team understands what conduct is expected from them. This helps provide guidance for your staff, as well as assist with any disputes or HR issues that may arise further down the line. Developing clear company policy can also be a key principle in your company's commitment to eliminating forms of workplace discrimination.

This is a plus when it comes to recruiting and retaining staff as well as employee relations as a whole.

Implementing sound recruitment processes to get and maintain the best talent.

The hiring process for an SME can be a daunting one, especially if you're on a strict budget. Taking the time to carefully construct your job advertisements can help ensure that you attract the best candidates for the job.

Constructing the right advert should include, what the position will entail, and how much experience the ideal candidate should have. However you need to take care that the advert itself doesn't discriminate.

This might sound simple but actually it might not be as simple as you think, for example requiring that the candidate be a recent graduate, may indirectly discriminate against older individuals. Bear in mind to take into account the merits of a diverse interview panel as this could give greater insight and increase the likelihood of getting the best candidate.

Writing and keeping contracts of employment up to date as well as providing an SMT

When taking on a new employee, you will need to provide a Statement of Main Terms (SMT) of their employment, before they start the role. This should outline things such as their start date, their holiday entitlement, and any notice periods required to terminate the employment.

Provide proper onboarding, inductions and training for all staff

Properly onboarding and training staff is not only essential for new employees to get a feel for the role and learn the key processes that they will be performing on a daily basis. It is also vital for employee engagement and allows for teams to further develop through ongoing support.

A proper induction also allows you to outline HR compliance to new employees in line with your policies, so new starters are aware of expectations and HR practices from day-one.

Implement effective salary benchmarking

The pay that you will provide to your workforce will be based on a number of factors, such as the experience or qualifications you expect them to have. You should however bear in mind that you cannot legally pay them below the current national minimum wage rates, which changes every April.

Failure to provide at least the minimum wage, in line with current employment laws, can lead to a fine from the HMRC alongside being publicly named and shamed. Bad news for a small business just starting out.

Ensure staff entitlements and remuneration is in line with UK employment law

Your employees will expect to be paid on time so you should implement a system to ensure this happens. In accordance with current UK employment law, it is illegal for unauthorised deductions to be made from an employee’s wage and this can result in an employment tribunal if this situation is not rectified quickly.

You can invest in HR software that will help you with this alongside managing other HR support related requests, such as holidays.

When considering holiday allowance remember that almost all workers are legally entitled to 5.6 weeks’ paid holiday per leave year (this can be pro-rata). To work out how much leave an employee is entitled to you can try our handy annual leave calculator to help with this and other HR challenges.

You can always give more than the minimum if you choose to, however you should fully consider the demands of your business.

Monitor your business' progress and review your documentation regularly

Whether your business is using an in-house HR team or you outsource HR services, regularly reviewing your company policies and documentation is a must. As your business grows and you increase your staff intake, this inevitably comes with the increased risk that you will outgrow your company policies and potentially be vulnerable to litigation.

It might be the case that investing in a HR professional in house is more beneficial once your business expands beyond a certain size. With employment law subject to change with the new government, even the best HR department will have to review their company documentation to ensure compliance under law.

Talk to the HR experts at Croner and get HR support for your small business today

With over 80 years in helping business owners with their HR, Employment Law and Health and Safety challenges, we can help your business find the ideal solution to effectively manage HR and remain compliant with UK law.

Partner with Croner and gain access to a wealth of benefits, get in touch with one of our experts on

0800 124 4973.