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How Do Small Businesses Without HR Departments Handle HR Issues?

How Do Small Businesses Without HR Departments Handle HR Issues?

Managing Human Resources (HR) is critical for any business, regardless of its size. However, small companies often lack a dedicated HR department, which can lead to challenges in managing employees effectively. So, how do these businesses handle HR issues? Let’s explore some strategies.

The Role of the Business Owner

In many small businesses, the owner takes on the role of the HR manager. This involves handling tasks such as recruitment, employee onboarding, payroll management, and compliance with labor laws. Although it’s a heavy workload, this approach allows the owner to maintain direct control over these crucial aspects of the business.

Leveraging Technology

Technology can be a lifesaver for small businesses managing HR tasks. Various software solutions can automate processes like recruiting, payroll, benefits administration, and performance management. This not only saves time but also reduces the chances of errors that could lead to legal complications.

Outsourcing HR Functions

Outsourcing is another viable option for small businesses. By partnering with a professional employer organization (PEO), small businesses can access comprehensive HR services without the need for an in-house team. PEOs can help with everything from hiring and benefits administration to ensuring compliance with employment laws.

Training Managers

Training managers to handle certain HR functions can be a cost-effective solution. With proper training, managers can handle tasks like performance evaluations, conflict resolution, and even some aspects of recruitment.

Using Online Resources

Small businesses can also utilize online resources to manage HR issues. Websites like the SBA offer guides on HR best practices. Similarly, online communities and forums can provide platforms for business owners to share advice and learn from each other’s experiences.

Consulting with Legal Professionals

Consulting with legal professionals can help small businesses navigate complex employment laws. This can be particularly helpful when dealing with sensitive issues like workplace harassment, discrimination, or wrongful termination claims.

Implementing Clear Policies

Clear, well-documented policies are crucial for managing HR issues effectively. These policies should cover areas like equal opportunity employment, harassment, leave, compensation, and disciplinary procedures.


While managing HR without a dedicated department can be challenging, it’s definitely possible. By leveraging technology, outsourcing, training managers, utilizing online resources, consulting with legal professionals, and implementing clear policies, small businesses can effectively handle HR issues.

Remember, the goal of all these strategies is not just to comply with laws and regulations, but also to create a workplace where employees feel valued and respected. After all, your employees are your most valuable asset, and managing them effectively is key to your business’s success.

Contact HR Business Partners a Minneapolis, MN-based HR Consulting firm specializing in HR Outsourcing / Fractional HR services today to discuss your individual HR needs.