Most small businesses don’t have the luxury of an in-house HR team. And yet — they’re subject to the same laws, risks, and responsibilities as large corporations when it comes to managing people.
For Australian SMEs, “doing HR” isn’t just hiring and firing. It’s an ongoing, strategic function that can either support growth or cause chaos.
To help you stay compliant, avoid Fair Work claims, and build a great place to work, here’s a breakdown of the 8 core areas of HR every small business owner should understand — and where to get help if you don’t have internal expertise.
1. HR Compliance & Employment Law
This is the foundation — and the one most small businesses get wrong first.
Key responsibilities include:
- Ensuring contracts and policies align with the Fair Work Act 2009
- Understanding National Employment Standards (NES) and award coverage
- Keeping up with changes to minimum wages, leave entitlements, and termination rules
- Complying with workplace laws around discrimination, harassment, bullying, and general protections
Mistakes here lead to:
- Underpayment claims
- Fines from the Fair Work Ombudsman
- Unfair dismissal cases
- Public reputational damage
If you’re not confident navigating awards or termination procedures, external HR partners like Hack Your HR offer practical support without needing to hire a full-time HR manager.
2. Recruitment & Onboarding
Hiring isn’t just about filling a role — it’s about:
- Writing compliant, attractive job ads
- Running fair and structured interviews
- Avoiding unlawful bias or discriminatory practices
- Ensuring reference checks and right-to-work documentation are completed
- Designing an onboarding process that helps new hires ramp up quickly
Poor recruitment practices lead to bad hires, high turnover, and even legal exposure.
Need a hand with hiring? Partnering with an external recruitment firm like Ingenious People can provide cost-effective solutions tailored for small teams.
3. Workplace Policies & Procedures
Every business needs:
- An Employee Handbook that outlines expectations
- Clear policies on leave, performance, discipline, conduct, and grievances
- Compliance with modern slavery, privacy, and workplace health and safety obligations
But here’s the trick — policies only work if:
- They’re actually followed
- They’re reviewed annually
- They’re communicated clearly to all staff
PDFs sitting in folders don’t protect your business. Implementation is key.
4. Performance Management
Many SMEs avoid formal performance processes — until things go wrong.
Your business should have:
- Clear KPIs and goals
- Regular 1:1s or check-ins
- A simple performance review template
- Documentation for underperformance or misconduct
Why it matters:
- You build a high-performing team
- You protect yourself during terminations
- You create a culture of feedback and growth
Performance management isn’t about bureaucracy — it’s about fairness, alignment, and accountability.
5. Training & Development
Think L&D is just for big business? Think again.
In a small business, upskilling your team can:
- Boost retention
- Increase internal capability (less outsourcing)
- Improve customer experience
- Help junior staff step into leadership roles
Start small:
- Offer internal mentorship
- Use short courses (e.g. TAFE, Coursera, LinkedIn Learning)
- Run team lunch-and-learns or knowledge-sharing sessions
Even low-cost development builds loyalty and motivation.
6. Workplace Health, Safety & Wellbeing
All businesses have a legal duty of care under WHS laws — even if you only employ one person.
This includes:
- Safe work procedures
- Risk assessments
- First aid and emergency procedures
- Supporting mental health and psychosocial safety
Post-COVID, employees expect businesses to take wellbeing seriously — not just physical hazards, but also:
- Burnout
- Overwork
- Poor leadership behaviour
- Inflexible work arrangements
Don’t assume WHS is just for warehouses. It’s for every workplace.
7. Culture & Engagement
Culture isn’t a vibe — it’s what people say about your business when you’re not in the room.
You can’t force culture, but you can shape it through:
- How you communicate
- How you handle feedback
- Who you promote
- What behaviours you reward
- Whether you listen
In small businesses, culture is often set by the founder or leadership team. Make sure it’s intentional.
You don’t need ping-pong tables. You need trust, respect, and clarity.
8. HR Systems & Admin
Finally, even small teams need the right tools.
At minimum, use:
- A payroll and award interpretation system (e.g. Xero, Employment Hero, KeyPay)
- A leave tracker
- A secure employee record system
- Digital access to policies and contracts
- Optional extras like performance and onboarding platforms as you scale
Manual spreadsheets and inbox-based recordkeeping are risky and inefficient.
Where to Start: A Mini HR Roadmap for Small Businesses
If you’re doing this alone, here’s a sequence to work through:
- Contracts and policies — Review all employee documents for legal compliance
- Onboarding and performance — Create templates and processes that scale
- Payroll and compliance systems — Ensure awards are interpreted correctly
- Engagement and feedback — Run a pulse check survey or exit interview
- Training and support — Upskill leaders and set expectations
You don’t need to do it all at once — but you do need to get started.
Final Word
Small businesses wear many hats — and HR is often one of the most neglected.
But here’s the truth: great people practices aren’t a “nice to have.” They’re the foundation of your growth, your reputation, and your resilience.
And you don’t have to do it alone.
Consultancies like Hack Your HR specialise in building out HR foundations for Australian small businesses — cost-effectively, practically, and without the jargon.
Because in today’s world, “we’re just a small business” isn’t an excuse.
It’s a reason to get your people operations right — from the very start.