15 Tips for Small Businesses on Handling HR Processes

Establishing effective HR processes is critical for small businesses, but it is often difficult due to limited time, resources, and personnel.

Navigating these HR processes as a small business expands can be a daunting task, so we've gathered fifteen invaluable tips from CEOs and founders on what worked best for them when establishing and scaling their businesses. From automating HR with a personal touch to implementing a self-service employee portal, these seasoned professionals offer their most valuable advice for managing a growing team.

Define Your Hiring Strategy

Having a successful company starts with hiring the right people, so here's what our experts said small businesses should focus on when hiring and establishing roles:

Prevent HR Issues with Holistic Hiring

As a small business owner, I know that prevention is key when it comes to HR processes. Dealing with conflict and clashes is a sign you've already failed in some way—HR processes are inherently lengthy and will take time away from more important issues.

I avoided the majority of HR issues through careful hiring. Far too many business owners are fixated on landing the best of the best in their field, and while this feels like an obvious strategy, it actually downplays the importance of personality.

For a cohesive and connected workforce, holistic hiring is a must. Every team member you bring on should have a clear place in the hierarchy and a communication style that complements existing employees.

Accomplishing this means starting early. Careful evaluation during hiring, paired with a trial period, can eliminate most costly and time-consuming HR processes, freeing you up to expand your business.

Rob Reeves, CEO and President, Redfish Technology

Directly Handle Hiring Processes

Do the hiring yourself! While it may be tempting to outsource HR tasks, such as recruiting and onboarding, as a small-business owner, it is crucial to personally handle these processes. Not only does this ensure that you have a thorough understanding of your employees and their roles within the company, but it also allows for more personalized and effective hiring decisions. 

As a founder, you have a deep understanding of your company's values, culture, and goals. By being directly involved in the hiring process, you can ensure that each new employee aligns with these core principles.

Joshua Varner, Owner, Varner Roofing

Visualize Workflow Expectations for Roles

As a small-business founder across a few ventures now, I've found one of the most valuable ways to handle our HR processes in our growing businesses has always been to workflow what the expectation is for a role. 

If we want to hire a marketer, we want to lay out visually what their starting point in their role is and what the objective/result is that is expected from them! By laying things out visually, we can assure and ensure that every aspect of the workflow has proper training and SOPs to support, and gives us a baseline for the future hire to optimize.

Matthew Sanjari, Founder and Business Coach, PRIME Consulting

Focus on Employee Engagement and Company Culture

Hiring the right people is only the first step to success; In order to retain top talent, your company must prioritize employee engagement, growth, and a healthy company culture. Here's what our experts recommend when focusing on these aspects:

Develop Leadership and Management Skills

A crucial tip for small-business owners handling HR processes is to invest in developing strong leadership and management skills. Effective leaders inspire, motivate, and guide their teams toward achieving business goals. 

Offer leadership training for yourself and your management team to improve communication, conflict resolution, and team-building skills. Strong leadership fosters a positive work culture, reduces employee turnover, and drives business success, making it an invaluable asset in managing a growing workforce.

Phil Strazzulla, Founder, SelectSoftware Reviews

Foster a Strong, Positive Company Culture

My most valuable tip for small businesses is to prioritize building a strong, positive company culture from the outset. A clear and engaging culture attracts talent, motivates employees, and reduces turnover, which is crucial for a growing business. 

Start by defining your core values and ensure they are integrated into every aspect of your HR processes, from hiring and onboarding to performance evaluations and employee recognition. Communicate these values clearly and often, and lead by example. Investing in a culture that employees are proud to be part of fosters a motivated, productive workforce that will drive your business forward.

Jim Pendergast, Senior Vice President, altLINE Sobanco

Create Employee Engagement Opportunities

One of my pivotal tips for navigating HR processes is to actively create opportunities for employee engagement. This approach has been instrumental for us. 

For instance, early on, we implemented monthly team-building activities, varying from fitness challenges to creative brainstorming sessions. This fostered a sense of belonging among our team and also significantly boosted morale. As a result, we saw a notable increase in productivity and innovation. 

My advice? Never underestimate the power of making your team feel valued and involved; it's transformative.

Jay Barton, CEO & Founder, ASRV

Track and Enhance Employee Engagement

Don't ignore employee engagement. At our cryptocurrency tax software startup, we quickly recognized that engaged employees are essential for growth. We honed in on the Employee Engagement metric. We tracked (and continue to track today) employee engagement via direct and indirect feedback. It's great to be sure everyone is involved and grinds toward success, both for well-being and financial growth. 

Engage your team, enhance your environment, and watch your business thrive. Inject your team with a dose of curiosity. Push them to dive deep into the abyss and uncover the latest trends and growth hacks. Have them bring back the gold—new insights and innovations—to share with the pack. Reward that with new projects, bonuses, and endorsements.

David Kemmerer, Co-Founder and CEO, CoinLedger

Prioritize Communication and Transparency

One of the most valuable tips for successfully handling HR processes while managing a growing business is to prioritize communication and transparency. Make sure to keep your team informed about any changes or updates, listen to their feedback, and address any concerns promptly. 

Fostering an open and honest environment can build trust with your employees and create a positive company culture that will help your business thrive. Remember, happy employees are productive employees!

Alex Stasiak, CEO & Founder, Startup House

Build Strong Team Member Relationships

My digital agency is still pretty small, and we don't have a dedicated HR department yet. I assume most startup business owners and founders are in the same shoes, so here is my number one tip.

When handling HR processes for your growing business, it is extremely valuable to invest time in building strong relationships with your team members. Get to know each employee individually, understanding their strengths, weaknesses, and career aspirations. If you don't have an HR department, you have to assume certain responsibilities and skills that a professional would have. That's why it's worth studying methods and techniques for employee management so you can provide a more supportive work environment. 

A practical technique I recommend is regularly scheduling one-on-one meetings with each team member to discuss their current goals, challenges, and areas where they need support. Doing this at least once every quarter will give you a lot of valuable feedback on each employee's experience. This is a manageable and realistic approach for small teams that has long-term benefits. 

By building relationships, we create a supportive environment where employees feel valued and motivated to contribute their best work. This personal touch not only strengthens our team cohesion but also fosters loyalty and reduces turnover—a win-win for everyone involved. I hope that helps! Please let me know if you have any further questions. 

Nikola Baldikov, Founder, InBound Blogging

Utilize HR Technology

Once your small business has established effective hiring and employee engagement, the next big hurdle to tackle is general HR processes. Read on to see what our experts recommend when it comes to HR software, tools, and automation:

Automate HR with a Personal Touch

One of the most valuable lessons I learned along the way is the importance of automating and personalizing HR processes. At the beginning of Messente's growth, we recognized that manually managing HR tasks is time-consuming and prone to mistakes. Implementing automated HR systems dramatically increased our productivity and accuracy in employee records management, payroll management, and performance evaluation.

Automation doesn't have to mean a loss of personal touch. Balance is key. For example, while automating the onboarding process has enabled us to streamline the process, we still make sure that every new team member is given the personal attention they deserve, understanding their specific skill sets and how they fit into our mission of safe, scalable business communications.

This approach improves our operational efficiency and has helped create trust and a sense of belonging among our employees.

This combination of automation and human touch has transformed how we do business, allowing us to focus on strategic growth while ensuring our team feels appreciated and included. It's an example of how technology and human-centered practices can propel a company forward, a concept that reflects the values of Messente.

Uku Tomikas, CEO, Messente

Invest in HR and Business Technology

I recently heard on Tara Newman's “Bold Leadership Revolution” podcast the idea of not scheduling your life around your business but instead building your business around the life you want. 

For me, as a solo HR practitioner working with 20+ employers at any given time, in order to achieve that, I need to be sure that I am managing my time as efficiently as possible. That means I need to invest in not only the best HR tools to stay up-to-date and to provide my clients with valuable services but also in business technology to create and manage my SOPs so that I am organized, efficient, and prepared for growth.

Nicole Craveiro, CEO and Fractional CHRO, CraveHRO

Bring in HRIS and Hire HR Expertise

The most valuable tip I recommend for successfully handling HR processes while managing a growing business is to invest in software and expertise early on. As a small-business founder, I learned this lesson the hard way. 

When we were just starting out, I tried to handle all the HR processes myself using basic spreadsheets and documents. However, as we grew from 5 to 50 employees, juggling everything from payroll to benefits to compliance became overwhelming. 

I finally realized I needed to bring in help. We implemented an HRIS system for managing our people's data and brought on a part-time HR manager to own our processes. It was a game-changer. 

With the right technology and expertise, I could focus on our core business while ensuring HR operated smoothly. The investment paid dividends in improved efficiency, reduced risks, and higher employee satisfaction. My advice is, don't wait until you're drowning in HR work. Lay the foundations to scale your people operations early. It's one of the best investments you can make in your growing business.

Sai Blackbyrn, CEO, Coach Foundation

Organize with Software and Set Tasks

What I’ve learned is that you need to let stuff get away from you. I used to lack discipline and organizational skills, so I forgot about things or misplaced them. I let them pile up, and that meant the HR side of managing my business was a mess. 

My advice, if you don’t want to hire HR, is to get some organizational software and keep it on a leash. Make a calendar, make a list, get Trello, and set your tasks. As long as you know what you need to do and always have it in mind, you can’t let it get away from you.

Rick Berres, Owner, Honey-Doers

Implement a Self-Service Employee Portal

Get a self-service portal for your employees. Torokhity Weightlifting has a self-service portal that serves as a one-stop shop. Every employee has a comprehensive profile that includes their personal and employment documents. It also includes time-tracking updates and pay stubs. Employees can access various resources and documents—onboarding materials, educational resources, benefits details, time-off policy, FAQs, etc. 

Every time an employee comes to me with a new question or issue, I make sure it gets documented and added to our FAQ section. This way, if the question arises from a different employee, the answer is just a click away. Keeping our portal dynamic has improved our HR efficiency. It saves time, streamlines information dissemination, and empowers our team members. They have direct access to information when they need it, which also encourages self-reliance.

Oleksiy Torokhtiy, Founder, Torokhtiy Weightlifting

Leverage Technology and Document Policies

One valuable tip is to leverage technology to streamline HR processes. Tools for recruitment, onboarding, payroll, and performance management can save time and reduce errors. It's also important to create clear, documented policies early on. This provides a solid foundation for your team and helps navigate growth more smoothly. 

Emphasizing open communication and feedback fosters a positive culture, crucial for retaining talent as your business expands.

Ana Alipat, Recruitment Team Lead, Dayjob Recruitment