Small business makes up a significant proportion of the Australian workforce, with 96 per cent of the nation’s businesses categorised within the small-business sector, according to recently released data from the ABS.

Business survival is a challenge in tough economic times and, according to research released by McCrindle in May, only half the new businesses that launched in 2009 survived their first four years of operation.

While most corporates and some medium-sized businesses have teams dedicated to human resources, it’s rare for small businesses to have these functions.

Small-business owners, however, have to deal with the same people-management issues that big businesses do, including recruitment, employment contracts, organisational and people development, remuneration, employee relations, evaluation and exit strategies. If they don’t do that well, it can cost them dearly.

From a small business owner

David Little runs Bon Velo, a SAM (small and micro-business) consulting service, and says small-business owners aren’t overlooking people-management issues, but they are confused about how to deal with them.

“They perceive they have to be chief cook and bottlewasher, and I think a watered-down corporate approach doesn’t make sense in their terms. So they don’t understand how to avail themselves of the services that might be appropriate for them”.

With small business making up such a significant proportion of the Australian workforce, AHRI has been working with COSBOA and other organisations to develop people-management offerings that are relevant and helpful.

AHRI chief executive Lyn Goodear

“In many ways it prohibits the growth for many small businesses. They get to a point where there are too many people and it becomes too hard, so they just don’t grow. They have to take on more people and that presents complications they don’t want to deal with and aren’t skilled to deal with”.

“We believe, and it’s a commonsense line, if you deal with your people-management question in the first instance, you may never have to deal with or ask about compliance issues such as discrimination, bullying and unfair dismissal”.

“When you deal with people, there are a great many issues and challenges,” she says. “However, it’s also the diversity of people that can make a workplace fantastic – but that diversity need to be managed to maximise its benefits.”

“Putting pre-emptive people-management practices in place to attend to issues before they arise saves time and money – and creates opportunity. Good HR is good for both big and small businesses. The old cliché rings true: prevention is better than cure,” says Goodear.