Human Resources: Top Issues for Small Businesses

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Our current business environment is rapidly changing, including how we manage and lead our employees. Because of these many changes, CEOs and business leaders are faced with a variety of challenges affecting their human resources departments. It is important to quickly identify these common human resource challenges. Doing so will allow you to prevent them from occurring in your small business. 

Top Human Resources Challenges for Small Business Owners

Recent studies by human resource professionals have identified several challenges that are currently facing businesses of all sizes, with an increasing impact on small business owners. These challenges are exacerbated by a lack of human resource professionals equipped with the skills necessary to address these issues head-on. 

Retaining & Developing Top Performers

As the workforce gets older, finding ways to attract younger employees will be important. With many opportunities for flexible schedules as well as work from home positions, it is important to consider adding these attractive options for your existing team members. Developing new, nontraditional compensation formulas and work hour flexibility will help your small business attract and retain top performers.

Employee Training

An employee development plan will move your organization closer to its long term strategic goals. By providing increased opportunities for employee training, you will not only contribute to the success of your organization but also the personal development of each team member.


As technological advances continue to change the way we do business, your organization must remain competitive. Keeping your organization’s technology (both hardware and software) up to date will be critical in your future success. Doing so will benefit both your team and your clientele.

Understanding Compliance Issues

There is an abundance of federal, state, and even local statutes, laws, and rules that every business must follow. As a small business owner, it can be overwhelming to dedicate the time necessary to remain current on these ever-changing issues. However, it is important to develop an understanding of these mandates to keep your business out of trouble.

Lack of Written Job Descriptions

Even in the most laid back of companies, every job should have a specific job description that clearly outlines the tasks necessary for the position. This written description should include both the skills and training needed by the employee. A written job description will eliminate confusion while ensuring that each member of your team is qualified for the position they hold.

Informal Hiring Process

Regardless of the size of your business, every business must develop a formal hiring process. This process should include the following: 

  • Detailed Application
  • Background Checks
  • Past Employer Reference Checks
  • Drug Testing (if necessary)
  • Interview with More Than One Person
  • Personality Testing (if appropriate)


A formal hiring process will help set the standard for your business by properly screening each candidate while ensuring that your team is built for success. 

Outsource Your Human Resources Department

Many small business owners struggle with the challenges outlined above due to an insufficient human resource department. For many small businesses, it is wise to outsource these important tasks to a professional team. At LUXA, we have a team of experts ready to assist you with all of your important human resource responsibilities. Learn more about outsourcing your HR services here!


LUXA Enterprises specializes in HR services, outsource accounting, bookkeeping, and payroll services. We match up with ideal candidates for services by allowing small to midsize businesses to increase focus on their growth through outsourcing. If you want to know how we can help you, contact us today!

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