March 21, 2016

Small Business- HR Challenges

Human Resource; if  you  say the word you  get two words having different meanings. It’s not just about resourcing the manpower; it’s about resourcing the future to your organization. How you attract the talent is not important but how you retain and manage the talent with maximum optimization and resourcefulness is more important.

Operating as an HR on large scale organization is a professional challenge, where the management has already decided about the HR  Budget and the HR  team has  to manage the functions  with  given  inputs affordable inside the budget to give desired outcome. But when the same things change the side coming to a small organization operating on small scale doing a little business to get themselves stand in the market; do you thing the entity is able to fund the HR for the functions and activities of HR. The answer is big ‘NO’; then what about the employees of that organization.

We will leave them unattended leaving behind their concern and worries? In this article I would like to keep a clear picture of challenges and solutions while setting up an HR department for small organizations.

First of all we will take into consideration the basic HR function which we cover in our day to day business.

Ø Recruitment

Ø Immigration and MOL

Ø Induction and orientation.

Ø HR Policies and Procedures

Ø Compensation and Benefits

Ø Employee Relations

Ø Performance Appraisal

Ø Separation


Recruitment is the base of the organization. Small businesses concentrating on a large profit always do this mistake of avoiding this most important function of HR or rather they just look at it as filling up the empty place. While recruiting a candidate we should have a job description and specification ready in hand. When we process the application we should attract the best talent within company budget.

But while attracting such talents there are few obstacles. First is the company budget; as they are asking for experienced people with the lowest salary in the market which will be offered to a fresher. Secondly they do not have a defined job description which makes it difficult for HR professionals to understand what the correct requirement is. As the company cannot afford to outsource the things and not even afford to buy a job portal,

the only option  remains  in  hand is advertisement on  free sites. Here you  lose your  hope  of hiring the best talent as only the people who are unemployed or not satisfied in current job apply for the opening and as you don’t have any option you have to choose amongst them. Wait it’s still not finish as you will have to face the personal  references from  owner  in  the second  half  of  the recruitment.  Lengthy procedures to  approve  the selected candidates application is again a challenge.


Continuing with the recruitment many of the owners of small organizations ask for payment of the expenses from employee. They not even bother to give them ticket to fly to the destination to join the duties. Here you face difficulties as you are the face for the organization. Many people regrading this article will think it’s not true. But I  have experienced it; it’s the  bitter  truth  in  the biggest international market. I have seen  people paying two side money i.e to the agent who supplied their CV and to the employer who gave them the job and this is just to get a minimal salary. And after paying this much amount also they do not have any job security.

They get terminated within six months and the law also is against them as the employer possess the right to terminate the service if its unsatisfactory.


Induction, orientation,  buddy program, arrivals meeting  are the words which  are  unknown  to  small organizations. Once the employee is joined, without any orientation and introduction to the company business and policies the employee takes the charge. Now you can imagine the situation of newly joined employee who has to fulfill his duties without any idea of the environment where he is trying to survive.


Have you  ever  tried  implementing the policies in  small  organization?  I  challenge you  to do  it. HR  policies these are only two words but when  you  try to implement the same  you  face real challenge of  real time.

Employees who work from the beginning of the organization are the most stubborn people who do not wish to implement the change. Though your policies will make their work easy they do not wish to accept it.


When  you  calculate  the  leave for  the employee  whose  records are not filed  and you  don’t  even  know his joining date what will be your reply? Small business firstly does not concentrate in keeping the records of the employee information. And when you start to do so unwillingly it keeps some sort of mismanagement in your work.

Law is just another concern which is only considered when the Labour inspector knocks the door. Because for many employees they have not fulfilled the basic requirements specified under the law.


Arguing fighting damaging the company property are the most common issues. And here you do not get three tier systems to solve the problem or any disciplinary action. There are only two ways either termination or just ignore and go ahead.


When you don’t offer your employee basic benefits covered under law; employee recognition and appreciation  are the much difficult terms you hardly get implemented in such organizations. You can find people working on same position and same salary from couple of years. How can we expect professional dedicated work from this people?


Termination followed by immediate separation is most unwanted event for an HR. your position is to value the human capital in order to give maximum profit to the company is been questioned because you are forced to terminate someone without any fault and just because management doesn’t want to continue with him.

Hearing to all this problem it will give a miserable picture of

Hasty hiring procedures

Poor quality operations

No system

No records

But every problem has solution

The solution to solve all the above problem is difficult to start with but not impossible to achieve


The management should value its resources whether tangible or intangible living or nonliving. They should implement a system  from the start of the organization. There should be  proper  channels of communication which should be followed in day to day  business. This can be done through organization chart which gives clear picture of the organization.


Each  and every document should be recorded.  Employee  should have  separate personal  files with  all  the records from his interview till his separation.


Every activity should be in the limits of law. This will help the organization to keep the legal side Safe and attract the goodwill


Every job should have defined  job description  and responsibilities. There should be a proper  balance of authority and responsibility.


A  timely performance  review  should be arranged  to boost the employee moral with  personal  recognition towards company achievements. Promotions, increments, best employee awards are some of the solutions.


Management should arrange small picnic and parties for the employees. This does not cost much but helps to gain employees satisfaction.


A  proper  committee should be appointed to solve employee  grievances. The decision  should  be always unbiased.


Separation  is not the ultimate solution. You  should always consider  employee  situation  while  giving the decisions. Termination results in affecting other employee’s mental situation. Hence the human capital should be valued more than any other capital while investing the business.

An Article by :

shraddha kutty

Ms. Shraddha Kutty

Designation – HR Officer

Company – Road Tiger Road Maintenance LLC. . (Abu Dhabi, UAE)s