The Human Resource Management Crisis is one of the biggest challenges faced by small business organizations. As the organizations function on a comparatively smaller workforce, their expertise level is low and miscommunications can arise while maintaining proper interaction. Therefore efficient management of human resource personnel for small businesses is one of the most critical junctures in the success of a business organization. Following are some of the grave human resource challenges faced by small businesses-
Human Resource Challenges Faced by Small Businesses
Human Resource is one of the biggest impediments to growth for small business organizations. Following are some of the biggest challenges faced by small businesses in terms of Human Resource Management-
Staying up to date with current rules and regulations
Any business venture is guided based on the principles of certain rules, regulations and guidelines. These are locally authored, instituted by the regulatory body that is responsible for implementing the plans and policies associated with the functioning of the business organization. At times, small businesses tend to drift towards the monetary benefit and therefore engage in practices that are considered unethical in terms of societal rules, regulations and norms. Therefore strict authoritative and regulatory bodies should be constituted to monitor the actions of such small businesses. Regularly checking the local business guidelines and norms and simultaneously hiring an attorney under extraordinary circumstances are some of the actions that can be followed by small businesses. Â
Having a well-proof plan for employee acquisition and retention
Small businesses can only overcome Human Resource challenges when they possess a full-proof plan on countering the employee turnover ratio. This can be done by efficient maintenance of the employee register. Strict policies must be adhered to during the process of employee acquisition. Job Interviews, Cognitive Assessment Tests and Written Assignments form the crux of the processes involved with acquiring and selecting the suitable employee for the perfect job. On the other hand, employee retention is an equally interesting human resource process that must be practiced by small businesses. Employees who are acquired must be retained in the organization through creating provision for incentives that can be both monetary and non-monetary. These incentives encourage the employees to work hard and stay committed to the organization, therefore, drawing better performance out of them.Â
Cultivating the Company Vision and Culture
One of the prime Human Resource challenges that are to be overcome by small businesses is the cultivation of the company vision, objective and culture. Firstly, the company vision is synonymous with the objectives and aims of the small businesses. Next, culture is the work environment that the businesses encourage. For example- negative work culture like office politics and large-scale employee turnover can discourage existing employees and render the effectiveness of the business organization in a position of disutility. On the other hand, if the company culture is positive, high growth and diversification are noticed in the functioning of the business organization. Moreover, a positive work culture also helps in encountering the challenges posed by the Human Resources department of a small business organization.Â
Neglecting the Process of Conflict Resolution
When a large number of people are working together, there is bound to be opinionated comments and friction in employee relationships. These conflicts can be solved only through amicable settlement and talks between the employees. At times small businesses neglect employee conflicts which can later emerge as a major headache for the business organization. At times the company personnel may sue the company and file cases of defamation against the rules, regulations and policies mandated by the company. Therefore the small businesses who have a limited pool of capital resources should deal with such Human Resource Management problems and make efforts to resolve them immediately.Â
Understanding the concept of cost of benefits
Small Business owners starting on their new business venture at times face failure in deciding a suitable reward mechanism or incentive scheme for their employees. It is clear from the discussion that the cost of benefits includes the other additional charges that are levied in addition to the basic salary packages. While some companies offer a medical allowance, other companies prefer providing support during times of crisis. Many employees are protected by the business organization through creating a provision through medical and non-medical benefits through garnering efficient insurance schemes.Â
Summary
Therefore consumer grievance redressal is practised through the fundamental Human Resource Management Principles in small businesses. To understand how small businesses manipulate the employer’s needs and keep creating demand, we need to understand that a business idea and an entity only becomes successful when the Human Resource Challenges are countered.Â
Frequently Asked Questions (FAQs)
Why is HRM a problem for small businesses?
The Human Resource Management Crisis is one of the biggest challenges faced by small business organizations. As the organizations function on a comparatively smaller workforce, their expertise level is low and miscommunications can arise while maintaining proper interaction. Therefore efficient management of human resource personnel for small businesses is one of the most critical junctures in the success of a business organization.
How can small businesses stay updated with legal procedures, rules and regulations?
Any business venture is guided based on the principles of certain rules, regulations and guidelines. These are locally authored, instituted by the regulatory body that is responsible for implementing the plans and policies associated with the functioning of the business organization. At times, small businesses tend to drift towards the monetary benefit and therefore engage in practices that are considered unethical in terms of societal rules, regulations and norms. Therefore strict authoritative and regulatory bodies should be constituted to monitor the actions of such small businesses. Regularly checking the local business guidelines and norms and simultaneously hiring an attorney under extraordinary circumstances are some of the actions that can be followed by small businesses. Â
Why is company vision and culture considered an important factor for small businesses?
Firstly, the company vision is synonymous with the objectives and aims of the small businesses. Next, culture is the work environment that the businesses encourage. For example- negative work culture like office politics and large-scale employee turnover can discourage existing employees and render the effectiveness of the business organization in a position of disutility. On the other hand, if the company culture is positive, high growth and diversification are noticed in the functioning of the business organization. Moreover, a positive work culture also helps in encountering the challenges posed by the Human Resources department of a small business organization.Â
What happens to small businesses that ignore the process of conflict resolution?
 At times small businesses neglect employee conflicts which can later emerge as a major headache for the business organization. At times the company personnel may sue the company and file cases of defamation against the rules, regulations and policies mandated by the company. Therefore the small businesses who have a limited pool of capital resources should deal with such Human Resource Management problems and make efforts to resolve them immediately.Â
What are the different cost benefits offered by small businesses?
It is clear from the discussion that the cost of benefits includes the other additional charges that are levied in addition to the basic salary packages. While some companies offer a medical allowance, other companies prefer providing support during times of crisis. Many employees are protected by the business organization through creating a provision through medical and non-medical benefits through garnering efficient insurance schemes.
