5 Tips to Help Your Small Business Effectively Manage Employees


help small business manage employee

Employees are an organization’s most essential asset. Companies earn profits only when employees brainstorm effective strategies and execute them flawlessly at a large scale. In addition, employees’ skills and abilities to understand the changing market trends and customer preferences make or break an organization.

But an enterprise gains these benefits only when it effectively manages its workforce, which requires top-notch employee management skills. They allow employees to reach their maximum potential and contribute their best, which enables the smooth running of the company and helps boost its revenues.

Nonetheless, small companies have a distinct set of problems. Most employees working in SMEs have close-knit relationships, meaning that employee management skills practiced in multinational conglomerates don’t work in this scenario.

5 Tips to Help Your Small Business Effectively Manage Employees:

Here are 5 tips to help small businesses effectively manage employees.

1. Hire wisely.

The first step is to hire wisely. Small businesses have specific needs and should look for candidates who tick all the checkboxes required to fill those needs. MNCs can bear the loss of recruiting a bad hire, but the same doesn’t apply to small businesses.

Small businesses should remember the following points while hiring:

  • What are the employees’ credentials?
  • Do they fit well with the company’s culture and values?
  • Do they display the ability to grow with the company’s needs?
  • Can they work for elongated periods if required?

2. Streamlined workflow.

Once you have the best employees working in your enterprise, you need to streamline the workflow. Streamlining the workflow means that your employees shouldn’t work chaotically. Instead, there should be a definite way of doing things. For this, small businesses must create a guidebook or manual that lets employees know what to do and how.

Additionally, you must also have:

  • A grievance redressal platform to solve employee issues instantly.
  • A performance analysis platform to monitor employee activities.
  • A one-to-one manager-employee relationship to help employees stay on track and deliver their best performance.

3. Mentoring employees.

Employees look up to their managers for seeking guidance to deliver their best in challenging situations. Managers must provide immense support to their team members by giving adequate training, sharing their mission, vision, and values, and demonstrating tasks in real-time.

Remember the following to become a top-notch mentor for your employees.

  • Effective communication plays an essential role in mentoring employees. It helps share project requirements, boosts job satisfaction, improves productivity, and makes employees feel less isolated.
  • Performance tracking systems like ERP Software or CRM software measure each employee’s output and share detailed reports with managers. It helps managers track each employee’s performance and identify those that are outperforming and those that require hand holding.
  • Small businesses mostly rely on hands-on mentorship, where the manager reviews each employees’ performance critically and provides real-time guidance face to face.

4. Never disrespect your employees.

Disrespecting employees can prove detrimental to your company. And this fact applies more to small businesses than big ones because small business employees have close-knit relationships, so misunderstandings and disagreements can quickly spread to other business quarters.

Thus, small businesses should remember the following:

  • Always respect your employees’ opinions. If you think their opinion lacks vision and credibility and fails to create the required impact, don’t judge them based on that. At least, avoid disparaging their reputation in front of others.
  • Appreciate employees if they make efforts to add value to your company. Value their out-of-the-box thinking skills by offering a small gift or commissions. Even a token of thanks would suffice for their immense contribution.

5. Create an impactful company vision statement.

Salaries and commissions play an important role in motivating employees to work with your company for an extensive duration. But if they aren’t aware of your long-term vision, it can lead to much confusion and significantly decrease their productivity.

An impactful vision statement is crucial for small businesses because of the following reasons:

  • It provides a sense of involvement to employees and helps them realize their efforts make valuable contributions to the company.
  • It helps employees identify objectives and prepare a blueprint to achieve them in a specified duration.
  • It allows managers to brainstorm effective strategies aligned with the company’s vision and critically examine the employees’ performance based on a specific list of factors.

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Small businesses face many other challenges regularly. For example, they must learn how to reduce distractions at the workplace. Many employees spend hours sharing pictures and videos on Web apps like Facebook and WhatsApp. This habit not only wastes their time but also pulls down their productivity. Therefore, big companies have ERP systems that track each workstation’s activity and send a live feed of which tabs are open on an employee’s computer. But that isn’t the case with a small business where employees are closely linked and mingle more than usual. You must allow a few breaks between work so that employees can share information during those breaks and focus on their work during working hours.

Small businesses face unique challenges and therefore require unique solutions. A combination of top-notch managerial skills and enterprise management solutions is key to boosting employees’ productivity and enhancing business performance.


Nishant Joshi likes to read and write on technologies that form the bedrock of modern-day and age like ERP, CRM, Web Apps, machine learning, data science, AI, and robotics. His expertise in content marketing has helped grow countless business opportunities. Nishant works for Sage Software Solutions Pvt. Ltd., a leading provider of Business Management Software in India to small and mid-sized businesses.

You can learn more about him on Linkedin

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