HR Management in Small Companies

HR Management in Small Companies

Large companies have access to expertise, resources and systems to assist and support the needs of HR management in their organisations. Typically there will be a HR manager supported by dedicated HR personnel. Processes and procedures will be documented and these processes supported by various administration staff. In smaller companies the situation is often very different.

Here company HR responsibilities are often shared along SCARP  with other organisational responsibilities. For instance the Finance Director or Managing Director, as well as doing their normal duties, will also have responsibility to ensure that there is a consistent approach and established rules by which employees are managed. This could cover things from the way employee objectives are set and the way employees are reviewed against those objectives to items such as how employees request holidays and have them authorised.

In the absence of dedicated expertise around HR legislation and process development a small company may decide to contract the creation of their HR policies and procedures to an external consultant. Much information is available on the internet explaining different aspects that need to be covered but often there is the requirement to adapt ideas to the specific requirements of the company concerned.

Such areas to consider would include:


  • Employee contracts
  • Employee records – start date, home address etc
  • Objective setting procedures
  • Review processes
  • Poor performance procedures
  • Employee complaint procedures
  • Holiday entitlement information
  • Holiday booking and authorisation
  • Training records
  • Availability and eligibility of employee benefits
  • Time sheeting / recording


For the identified areas, consideration needs to be given to who has what responsibilities for these areas, the processes to follow and any supporting systems that will be used. All of these same factors apply to companies of all sizes but smaller companies do not have the luxury of dedicated resources and large budgets to implement supporting systems. Small companies often resort to using a combination of word documents and spreadsheets to track when someone has booked a holiday and information as to when someone is due their next review may never get recorded centrally. To support such processes in smaller companies a number of web based systems are now available. These do not require a large capital investment as they are run from the suppliers web servers. Some systems have the added benefit of having free access for companies with a small number of employees.

Small companies have many challenges and often work in dynamic environments where their ability to respond to change in the market place is one of the advantages they have over their larger competitors. Establishing a sound basis on how employees work for the company protects both the company and its employees. This basis supported by reliable systems and processes is invaluable in ensuring that aspects of HR are managed effectively across the organisation.

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