Common HR Challenges

5 Common HR Challenges Small Businesses Often Face

Managing HR responsibilities is perhaps the biggest challenge many small businesses face. When the organization is in its initial stage, there are just a few people in the team who already have so many tasks to deal with.

Also, small businesses may not have sufficient finances to deploy a full-time HR department. But they can still have a dedicated PEO on their side who offers professional human resource solutions to overcome the challenges. Below are the five common challenges small businesses can tackle with the help of PEO services-

Recruiting The Right Candidates

Taking time to attract the right talent and vet the candidates is probably the biggest struggle small businesses face. If you recruit the candidates via agencies, you need to shell out a lot of money. If you choose to carry out the recruitment process yourself, you have to spare considerable time going through the resumes and vetting the applications.

This is where PEO HR services come into play! Outsourcing the HR responsibilities to an experienced PEO helps the recruitment process run smoothly. Just make sure to check the authenticity, reliability, and expertise of the remote HR services.

Retaining The Employees

If the HR responsibilities aren’t handled correctly, it can be challenging for small businesses to retain the right talent. When a company doesn’t take HR initiatives timely, there are chances of increasing conflicts, bad hires, etc. And, good employees are less likely to stay with such organizations that don’t have an efficient HR department to resolve the issues or take care of the team.

As a small business owner, you can consider partnering with PEO HR solutions to improve employee retention. From poor onboarding, ineffective communication to unsolved employee conflicts, a PEO takes care of all the HR jobs.

Training & Safety Of The Employees

Small businesses don’t have enough time to train the new hires, which may cause safety concerns. It is especially a major concern in technical workplaces. Having an HR professional to tackle the workforce training and safety issues can make a difference!

If you are on a tight budget, outsourcing the work to a PEO is a great alternative. They make sure that the employees get adequate training to reduce the risk of workplace injuries. Also, they can help you plan incentives for the staff, like bonuses, insurance, etc.

Managing The Payroll

Managing the accounts or payroll is a headache for small as well as large businesses. Small businesses spend thousands of dollars per employee annually to oversee the payroll. However, it is important to maintain the payroll in order to stay in compliance with the rules.

Failure to pay, tax fraud, accuracy-related penalties, underpayments, or late filings are some of the biggest problems employers may face if they fail to manage payroll or accounts. Partnering with an HR who understands the complexities involved in the tax can help you avoid such issues.

Staying Compliant With The Regulatory Laws

The failure to staying in compliance with the regulatory laws goes hand-in-hand with fines. Employee misclassification is perhaps the topmost compliance issue for small businesses. For example, suppose a company classifies the workers as contractors. Whether the authorities consider it as a deliberate or an accidental mistake, it may prove to be expensive.

Furthermore, as the business grows, you need to take into account any laws. If you want to avoid any issues, make sure to stay compliant with all the regulatory laws or policies. A dedicated HR professional can help keep your organization on track.


So, these are the five major problems small businesses often face. The way you hire, train, retain, or manage your employees affects the overall productivity of your organization. If you don’t have someone professional to deal with these tasks, it may prove to be disastrous for the business. Leveraging the expertise of a professional PEO is a proactive approach to overcome such issues.

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