Issue No. 06 | HR Basics Every Small Business Owner Needs To Know
Do you think you know the HR basics for your small business?
If I had to guess, you probably fall into one of three buckets:
You don’t have a clue what HR does. No judgement, I was called the Chandler Bing of my friend group for years because no one could explain my job.
You have misconceptions about what HR does. You think we are the fun police, the disciplinarians, or the ones who fire people (a mix of half-truths).
You have a very solid understanding of what HR does. If that’s you, I’m guessing you probably work in HR.
Wherever you land, I’m here to tell you that HR is necessary. But the good news is – if you’re a small business owner with even a one-man team, then you are doing it.
More good news? HR doesn’t have to be complicated. Really. I promise.
A lot of small business owners hear “HR” and instantly picture paperwork, red tape, and someone policing the break room.
But not so, my small business owner friend!
Okay, okay…HR can get a little complicated. But that’s only because we deal with people and, well, people are complicated. The organization and processes that support HR don’t need to be.
So it’s not even HR’s fault. It just gets a bad wrap.
To keep it simple HR is how you hire, train, support, and take care of your people — and in return they’ll take care of your business.
And the easier you make your processes, the easier it gets to deal with the more complicated people issues when they pop up.
Here are the core HR basics and simple processes every small business owner should know.
HR Basic No. 1 | Hire the Right Way: Small Business Hiring Process That Works
Hiring in a panic is a recipe for turnover, frustration, and wasted time (ask me how I know?). It can also tank your culture and morale faster than you’d think.
Here’s a simple hiring process that actually works:
✔ Write a clear job posting
Keep it simple. Spell out exactly what you need and what your ideal applicant looks like. Excitement is great—but if you get too fancy. This can lead to confusion and low application rates.
✔ Use consistent interview questions
Ask the same core questions for every applicant, but don’t be afraid to dig a little deeper when needed. Follow up by asking for details and examples or ask them to elaborate on one of their answers. And obviously, avoid the no-go topics like age, family, medical history, etc.
✔ Evaluate applicants the same way
Stay consistent, but trust your gut. I don’t believe in rating scales, but a solid process plus a good read on someone? That’s the sweet spot.
HR Basic No. 2 | Essential HR Documents For Small Business Owners
Not glamorous, but absolutely critical. These are your foundational HR documents for small businesses—the pieces that protect you today and give you something to build on as your team grows.
At the very least, small businesses should have:
Job descriptions
Offer letters or employment agreements
Basic policies (code of conduct, confidentiality, respectful workplace, attendance)
A simple process to document conversations when things come up
Think of these as your HR starter pack for small business owners. You can layer on more and refine as your business grows. This isn’t about turning “corporate”—it’s about clarity, consistency, and avoiding messy misunderstandings that cost time, money, and sanity.
HR Basic No. 3 | Onboarding for Small Business
Want to know the fastest way to kill the excitement of a new job? A first day with zero direction, structure, or organization. You’re new hires don’t need anything fancy, they just want clarity, structure, and someone who remembers their name by lunch. And in a small business? A little bit of organization goes a long way.
A simple, solid onboarding process should include:
A first-day agenda (so they’re not wandering around guessing where the bathroom is)
A clear breakdown of job expectations
A training plan for the first 1–2 weeks
Regular check-ins to make sure they’re not silently drowning
Introductions to teammates, tools, and how you actually do things around here
A strong onboarding process builds confidence fast and keeps turnover low. It sets your new hire up for success from day one.
Want a full breakdown on orientation and onboarding?
Click here → Onboarding vs. Orientation: What’s the Difference (and Do You Need Both)?
HR Basic No. 4 | Clear Expectations + Strong Communication
Nothing derails a small team faster than confusion. The good news? You don’t need fancy performance review systems (I strongly dislike them anyway) — you just need consistent conversations and clarity.
Here’s what every small business leader should put in place:
Define what “good” looks like — Make sure every role has clear expectations and an understanding of how they contribute to the big picture.
Set priorities often — Weekly or monthly check-ins keep everyone focused on what matters right now.
Give feedback (and do it often!) — Quick, honest, and constructive feedback keeps small problems from snowballing.
Make it easy to ask for help — Create a culture where questions are welcomed, not frowned upon.
Communicate openly — Regular, predictable conversations build trust and reduce misunderstandings.
Communication is one of the top HR skills for any small business owner. It’s also the easiest to improve if you actually make it a habit.
HR Basic No. 5 | Handle Issues Early (Before They Blow Up)
The best time to handle a situation? Before it becomes a problem. The second best? As soon as you notice it. Get in the habit of addressing issues as they come up. This could be anything from a minor error in process to a bigger performance issue or team conflict.
A simple, effective approach:
State what you noticed. Stick to the facts and behaviours.
Explain why it matters. How it impacts the business and the team.
Hear their side. You likely don’t know the whole story (even if you think you do)
Agree on next steps. Be super clear about expectations moving forward
Document the conversation. Notes. Notes. Notes!
Keep it clear and simple — just the way small business HR should be. See I told ya!
HR Basic No. 6 | HR Compliance For Small Business
You don’t need to memorize employment law—but you do need to follow it. Knowing the basics keeps you out of trouble and saves thousands in fines or legal fees.
Small businesses should have a handle on:
Minimum wage
Overtime and hours of work
Vacation entitlements
Stat pay rules
Termination rules
Health and safety obligations
This is an area where you should be enough to be dangerous. Bookmark your local employment regulations so you can grab them when you need them. Trust me—you will need them.
You don’t need a full HR department to run a great small business. With the right foundations—smart hiring, thoughtful onboarding, clear communication, staying compliant, and actually supporting your team—you can keep things running smoothly without the overwhelm.
And if you want a partner to help you build HR basics for small business in a simple, stress-free way, that’s exactly what I do at HR Formed. Once those basics are in place, you free up time and energy for the work that actually matters—and the day-to-day people stuff stops being a never-ending fire drill.
If you want to talk about what support can look like for you and your business, click the link below and let’s connect.