HR Insights for Small Business Owners: October 2025

As we enter the final quarter of the year, most small business owners are focused on wrapping up projects, closing sales, and keeping an eye on the year-end numbers. Those things matter, of course - but if you stop there, you’re missing one of the biggest opportunities of the year: aligning your people strategy with your business strategy for the year ahead.

Because here’s the truth - HR doesn’t exist in isolation.

It touches every corner of your business: your finances, your operations, your reputation, and your ability to grow sustainably.

When you make decisions about your budget, hiring, compliance, or performance goals, you’re making HR decisions - whether you realize it or not.

And Q4 is the perfect time to pause, review, and strengthen the connection between your HR practices and the rest of your business.

Here are five key areas to focus on before the year wraps up.

If you’re finalizing your 2026 budget, HR needs to be part of the conversation.

Payroll is almost always your largest expense - yet too often, it’s treated as a simple line item rather than a strategic investment.

This is the time to review how your people costs are distributed and where they’re heading next year.

• Are your wage increases in line with market trends and internal equity?

• Are benefit renewals or policy changes likely to affect your costs?

• Are there roles you’ll need to add - or ones that might evolve into something new?

Even something as simple as analyzing overtime trends can uncover hidden inefficiencies or capacity issues that need attention before you grow.

Budgeting for HR isn’t just about headcount - it’s about setting your business up to manage people effectively and affordably as you scale.

One of the most overlooked aspects of year-end planning is workforce planning.

Too often, small businesses operate in “reaction mode” - someone quits, and suddenly it’s a hiring emergency. Or a new project comes in, and the team scrambles to find help.

Instead, take time now to map out what your workforce needs will actually look like in 2026.

• Which roles are critical to your operations?

• Where might you need to cross-train or upskill your team?

• When should recruiting efforts begin for new roles (hint: at least 3 months in advance)

• Are you actively filling your pipeline with talent?

• Are there opportunities to use fractional or project-based support to stay flexible?

Intentional workforce planning helps you avoid last-minute scrambles and positions you to hire - and retain talent more strategically.

It also directly ties into your financial stability. The more you understand your workforce needs, the more accurate your budgeting and forecasting will be.

Employment laws don’t take a holiday break.

Every year, new regulations go into effect - sometimes at the federal level, often at the state or local level. These can include wage changes, leave entitlements, required notices, or pay transparency laws.

Before you close the books on 2025, it’s smart to:

• Review your employee classifications (especially if you use contractors).

• Audit pay practices to ensure they’re fair and compliant.

• Update policies and handbooks for 2026.

• Check your recordkeeping and posting requirements.

A quick compliance review now can save you from costly mistakes and headaches later. And if you’ve had growth this year - new employees, new locations, new vendors - it’s especially important to make sure your compliance practices have scaled with you.

Performance reviews have a bad reputation in many workplaces - but that’s usually because they’re treated as an administrative task rather than a leadership opportunity.

Done well, performance reviews are one of the most valuable conversations you’ll have all year.

They allow you to:

• Recognize what’s working.

• Address what’s not.

• Align employee goals with your 2026 business priorities.

• Revisit development needs and career growth paths.

The key is to keep the focus on clarity, growth, and communication - not criticism.

This is also a great time to ensure your managers have the tools and structure to deliver meaningful feedback, beyond the annual performance review. Even a simple, consistent framework can transform how these conversations go.

When employees understand where they stand and where they’re heading, engagement and retention naturally improve.

One of the most important mindset shifts for small business owners is realizing that HR is not a standalone function. It’s a central part of your business operations - and every business decision you make has an HR ripple effect.

Hiring impacts your budget.

Compensation decisions impact your culture.

Compliance impacts your brand reputation.

Development impacts your retention.

When HR operates in alignment with finance, operations, and leadership, your business becomes stronger, more stable, and far more prepared for growth.

That’s what I mean when I talk about a STABLE HR Foundation - it connects the dots between the people side of your business and every other moving part.

If you’re not sure where your HR foundation stands heading into 2026, I recommend taking the STABLE HR Assessment.

It’s a practical way to evaluate your HR stability across six key areas:

✅ Strategy & Structure – How aligned your HR approach is with your business goals

✅ Talent – How effectively you hire, train, and retain your people

✅ Accountability – Your day-to-day HR operations are efficient and compliant

✅ Belonging (Culture) – Building a culture that will sustain growth

✅ Leadership – How well your leadership practices foster trust and engagement

✅ Employee Experience – Whether your employees feel supported, valued, and motivated

You’ll get clear on what’s strong, what’s shaky, and what needs attention before the new year.

👉 Take the STABLE HR Assessment

As the year winds down, it’s tempting to focus only on closing out the books. But the most successful small business owners use this time to set the tone for the year ahead - to make sure their people, processes, and priorities are working together, not against each other.

A strong HR foundation doesn’t happen by accident. It’s built through intentional planning, clear priorities, and a willingness to treat HR as the business function it truly is: a strategic driver of growth and stability.

If you want to start 2026 with confidence, clarity, and compliance - start now.

Because every strong business begins with a stable foundation.

If you’ve made it this far, chances are you already know your HR foundation matters - you just might not know where to start.

That’s where I come in. I’ve spent my career helping business owners turn scattered processes into solid systems that actually support their teams and protect their business. Through On Demand HR Solutions, I offer practical, real-world HR guidance without the corporate red tape.

👉 Explore HR Services