A small business’s HR challenges are felt not only by the HR team. They can include compliance management, workforce training and development, compensation management, and recruitment.
And, addressing these challenges can involve IT, legal, all managers and employees, and external stakeholders (clients, investors, contractors, etc.).
Some of the most common HR challenges U.S.-based small businesses face today are:
- Fifty percent of small businesses view hiring a new employee in a specific time frame as a daunting task.
- Staying compliant with changing federal and state laws is especially tough for small businesses given limited resources and HR staff.
- Seventy-three percent of the U.S. workforce is actively disengaged at work and wants a job change.
It’s not breaking news that employees often face challenges in the workplace: We’ve all heard stories about toxic workplaces from our friends and family members. And we all enter the workplace with certain expectations.
Let’s look at an example of what a bad workplace does to employees.
Martina joins a small business and discovers:
- A toxic workplace with unethical management practices and rampant gender inequality.
- Lack of bottom-up communication; employees are discouraged from discussing their ideas with senior leaders.
- Most senior positions are held by male employees.
- Managers don’t provide objectives or clearly define employee goals.
- Most employees work long hours and late nights.
Uncomfortable with all of these factors, Martina quits the company within a month.
If your small business is using performance appraisal software alone, you’re not necessarily working toward improving employee performance—you’d need to use performance management software for that.
Today’s tech-savvy HR managers need to understand the difference between performance appraisal and performance management software and understand how to use these two tools in the way that is most beneficial for their business.
Here are the primary differences between these two software types:
- Performance management software helps managers provide regular (weekly, monthly, or annual) feedback to employees. It automates time-consuming tasks such as creating feedback questionnaires, deriving feedback results, and building employee performance analytics. It also helps managers identify the top talent and provide employees training on how to manage their goals.
- Performance appraisal software helps managers review employees’ individual performance and contributions. This process is usually carried out once or twice a year, depending on the business. The software streamlines this process by collecting employee goals, appraisal histories, development plans, etc.
In today’s tech-driven business world, before investing in any software tool, small-business owners do intensive research, including evaluating service level agreements (SLAs), cloud computing capabilities, integrations, and the price of the software.
But, the challenges don’t end once you’ve selected a tool; IT professionals face specific challenges when implementing new software. Some common challenges faced while implementing new HR software include:
Small businesses have a tough time finding the right candidate—and the data backs that up.
According to a survey from Monster
- Seventy percent of small to midsize businesses (SMBs) find the process to be quite expensive
- Eighty-nine percent of SMBs find it to be time-consuming