Top 5 HR Mistakes Small Businesses Make (And How to Avoid Them)

Running a small business means wearing a lot of hats, and HR often ends up at the bottom of the pile. But getting the basics wrong can be costly. Here are the five most common mistakes we see, and what you can do differently.

1. No written contracts

It's surprising how many businesses still don't have proper written contracts in place. Since April 2020, employees have been entitled to a written statement of particulars from day one, not within two months as it used to be. Without one, you're exposed if a dispute arises.

2. Using generic templates

Downloading a free contract or handbook template might seem like a quick fix, but generic documents often contain clauses that don't apply to your business, or worse, miss important protections entirely. Your documents should reflect how your business actually operates.

3. Not following a fair process

Whether it's a disciplinary matter, a grievance, or a redundancy situation, failing to follow a fair and documented process is one of the most common reasons businesses end up at an employment tribunal. The ACAS Code of Practice sets out what "fair" looks like, and it's more straightforward than you might think.

4. Ignoring sickness absence

Sickness absence can be difficult to manage, especially in a small team where everyone's contribution matters. But ignoring it, or handling it inconsistently, can lead to bigger problems. Having a clear policy and following it fairly makes all the difference.

5. Not keeping records

Good record keeping is one of the simplest things you can do to protect your business. Notes from meetings, return to work conversations, performance reviews; if it's not written down, it's very difficult to rely on later.

The good news

None of these mistakes are difficult to fix. With the right support and proper documentation, you can get your HR in order without it taking over your life. That's exactly what we help businesses do every day.