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HR Survival Guide: Key Strategies for Small-to-Medium-Sized Businesses
HR Survival Guide: Key Strategies for Small-to-Medium-Sized Businesses
With a new year comes new challenges for small-to-medium-sized businesses (SMBs).
From attracting and retaining top talent to navigating regulatory changes, the demands on your time and resources can be overwhelming.
Let’s explore the top HR challenges SMBs are facing and how to proactively turn obstacles into opportunities. By addressing these challenges head-on, you can create a supportive, compliant, and growth-oriented workplace, ensuring your business thrives long-term.
1. Attracting and Retaining Talent
Competing with larger organizations for skilled employees is a constant challenge for small businesses. To attract top talent, small businesses need to offer standout benefits, including competitive salaries, health and wellbeing perks, and a positive workplace culture. Onboarding and training new hires can be difficult due to limited budget and resources, time constraints, and a lack of dedicated training staff. In a well-known study for Glassdoor by the Brandon Hall Group, organizations with a strong onboarding process improve new hire retention by 82% and productivity by over 70%. If your team is focused on attracting and retaining top talent, think about how HR support can help you reach your objectives.
2. Compliance and Risk Mitigation
Navigating compliance requirements can be overwhelming and time-consuming, especially with constantly changing laws and regulations. Remote work adds another level of complexity, as businesses must comply with regulations in multiple states. If a business fails to be compliant, the consequences can be costly and result in fines, legal issues, and damage to the business's reputation. Prioritizing compliance and risk management is crucial for small-to-medium-sized businesses to avoid legal issues and maintain a secure, compliant business.
3. Financial Predictability
Managing costs is a constant challenge, especially when operating under a tight budget. Business owners need benefits solutions that are both affordable and impactful, striking a balance between employee needs and economic constraints. A partner with dedicated expertise can help SMBs implement effective cost management strategies for developing, forecasting and managing budgets.
When it comes to cost management strategies, it is important to think long-term while also keeping a couple of key things in mind:
- There are several different strategies that businesses can use to fund and administer their health plans. Employers who are willing to learn about their options, think critically about the pros and cons of each, and adopt the funding model that is the best fit for the needs of their business and employees stand to realize significant savings. Learn more about selecting the right funding model for your business to optimize your health plan here.
- Employees’ needs change over time and it’s important to continue to gather employee feedback to ensure the investments made into your workforce are being utilized. Employees need benefits that cater to their evolving needs at different life stages. Companies that understand and address these disparities can create a more satisfied and successful workforce.
- Long-term strategies for cost containment are crucial. The goal is to keep renewal increases low over time, not just for one or two years. This includes strategic sourcing, digital transformation, and employee wellness programs.
At the end of the day, every business owner is going to have different needs based on a multitude of factors such as geographical location, employee demographics, budget, organizational goals, etc. The best thing a business owner can do is keep an open mind and review options recommended by their consultant. Working with their consultant to create a strategic plan specific to their organizational needs is key.
4. Employee Satisfaction, Wellbeing and Retention
Retaining great employees is just as important as attracting top talent. A close-knit workforce makes employee engagement and morale a top priority for small-to-medium-sized businesses. Offering benefits that employees appreciate and find meaningful in their everyday lives is crucial. This includes not only traditional benefits but also initiatives that promote well-being and work-life balance. Employee retention can be challenging for small businesses for two reasons.
- Employees are part of a smaller workforce and may be forced to play multiple roles.
- Smaller businesses often have budget and resource limitations that mean they can’t provide the kind of benefits packages larger companies do.
Prioritizing employee wellbeing can lead to higher morale, increased productivity and lower turnover rates, making it a vital investment.
5. Scalability
As small businesses grow, they need benefits solutions that can evolve with them, ensuring they remain competitive as their workforce expands. This can be challenging due to the limited financial and human resources needed to scale operations effectively. Implementing scalable technology is also crucial for growth but often comes with a high price tag and requires expertise that small businesses may lack. While scalability might not always be a primary focus in conversations, it is essential for long-term planning and sustainability.
6. Ease of Administration
With limited HR staff, small-to-medium-sized businesses often struggle to keep up with changing laws and regulations, which can overwhelm employees and leave little time for administrative tasks. An easy-to-use platform and a team of expert professionals reduce this burden by simplifying HR processes. This will allow businesses to focus on growth while minimizing the administrative impact. This streamlined approach is highly valued by small business owners.
Empowering Small-to-Medium-Sized Businesses: Simplify HR, Enhance Growth
By addressing these challenges head-on, small business owners can better navigate the employment complexities in 2025 and create a collaborative and growth-oriented workplace. If your business needs additional support, partnering with our Professional Employer Organization (PEO), OneDigital Resourcing Edge, and our Small Business Team can be a game-changer. Our solutions help small businesses manage costs, attract and retain talent, simplify administration, ensure compliance, enhance employee satisfaction, and support scalability. We help provide affordable benefits, streamlined HR processes, and expert guidance.
Contact us to learn more about our solutions that cater to all your HR needs!