The Top 10 HR Issues Entrepreneurs Face – and How to Deal with Them

Employing a team gives your business the skills and people power it needs to prosper. But with human resources come people challenges. Not only do you need to ensure your business remains lawful but you must keep your employees engaged whilst ensuring your business flourishes. To help you focus on what really matters, here are the top 10 HR issues entrepreneurs face with advice on how to deal with them.

1. Recruiting the Right People

Number 1 of the top 10 HR issues: An unexpected leaver or an uptake in business can send operations into a spin and put additional pressure on your team. It can be tempting to rush recruitment but hurry to hire and you could end up with someone who doesn’t work out.
Solve your recruitment woes by setting up a hiring process. Invest time in writing quality job descriptions and person specifications so that only the most suitable apply. This will reduce the number of CV’s you’ll review and you’ll need to interview fewer, higher quality people saving time all round.

2. Deciding What to Pay

It can be difficult to keep in touch with the market rate for jobs, particularly in industries where skill sets quickly go in and out of fashion. Underpay and you won’t attract quality, experienced candidates. Overpay and you could cause internal rifts and end up paying more than you need.
If you’re carrying out your own recruitment, scan the market for similar job descriptions in the same region to establish rates of pay. Alternatively, use an experienced recruiter with their finger on the pulse so you can be sure you’re paying the going rate. They’ll also take away the pain of much of the recruitment process.

3. Your Employee Handbook is Ancient or Non-Existent

Number 3 of the top 10 HR issues: Writing an employee handbook might seem like hard work, but devote some time to capturing your people policies and explaining what’s expected from employees to save a lot of pain in the future. Your handbook should also set out the right steps to follow if something goes wrong. This will keep you on the right side of the law and reduce the amount of time spent thinking about what to do next. For a quick, easy and legally compliant solution, use a Human Resources consultant to write one for you.

4. Training Takes a Back Seat

When deadlines are looming, employee training and development often take a back seat. But advancing your team’s knowledge and experience translates into more potential for your business. To maintain your focus on this area, set up a people plan that identifies short and long term business goals and establishes what you need from your employees to achieve them. Pinpoint skills gaps and fill them with formal training, coaching or mentorship.

5. Employee Engagement is Ignored

Ensuring your people are engaged in their jobs is every bit as important for the health and wellbeing of your people as it is for the productivity of your business. Employee engagement can be as simple as:
• establishing your company’s ‘why’ (see this link for more)
• organising occasional social events
• regularly expressing your thanks to your team
• creating a pleasant working environment with items such as stand up desks, fresh fruit or cake on a Friday
Whatever you choose to do, ensure it fits with your company culture and is something your employees are interested in.

6. Managing Performance

Establishing what good performance looks like, ensuring it’s written down, agreed on, measurable and discussed are the cornerstones of performance management. However, all too often, performance management becomes a tick box exercise, not a meaningful year-round conversation.
Make sure you communicate the performance management process and timescales so everyone knows what to expect and what their responsibilities are. If worst comes to worst, and you need to dismiss someone due to poor performance, you’ll have followed the right process and documented it to ensure your approach is legal.

7. Managing Sickness Absence

Number 7 of the top 10 HR issues: If it hasn’t happened already, it’s likely you’ll need to deal with a problematic case of sickness absence. Sometimes, it will present as a serious long term illness requiring an extended period off work. At other times, an individual may take a large amount of time off at ad hoc times over the year.
Either way, this can be very disruptive for a business and needs to be dealt with. But you’ll need to tread carefully due to disability discrimination laws. Discipline or dismiss someone who has an underlying disability and you could end up in a tribunal on the grounds of disability discrimination. If there’s any doubt, consult with a Human Resources professional to ensure you take all the necessary steps.

8. Keeping Hold of Your Best People

There are certain people in your business you can’t afford to lose; from rising stars to your best salesperson, or someone whose experience and guidance you trust and rely on. To keep hold of these individuals, ensure they have the following:
• A good relationship with their direct manager
• Competitive salary and benefits
• Opportunity to use their skills and abilities
• Opportunity for advancement
Get these right for all employees and you’ll have a happy, engaged workforce who want to stay.

9. HMRC Requirements

There’s no doubt that tax is taxing. And, to add insult to injury, HMRC regularly move the goalposts. One of the trickier areas of tax, particularly for those businesses that use contractors or freelancers, is the classification of employees. The line between employees and the self-employed is a little blurry and stepping over that line can be costly. Read our earlier blog post on this topic for guidance.

10. The Last Of The Top 10 HR Issues: Employment Law

There’s no escaping it – employment law is part and parcel of hiring people to work for you. From discrimination and unfair dismissal to pensions auto-enrolment and new statutory pay levels, employment law is hazardous to SMEs. And, with Brexit on the horizon, it’s a safe bet that there’s more change to come.
Signing up to HR blogs and newsletters is a great way to keep on top of key employment law changes. And, if you need some extra support, you can always work with an HR specialist to roll out changes and ensure you’re compliant.
Keeping all the plates spinning, not mention the balls in the air, is a challenge for any entrepreneur. Treat your people well, in line with the law and they’ll be there to help you keep everything running smoothly.
If you need specialist HR support for any of the issues covered in this article, get in touch by calling us on 0330 555 1139 or via email at