HR Insights for Small Business Owners: September 2025

Running a small business isn’t for the faint of heart. You’ve got customers to serve, bills to pay, and a to-do list that never ends. And somewhere in between, you’re also expected to be the HR department - handling performance issues, staying compliant, and making sure your people are taken care of.

This month, I want to dig into a few HR topics that are showing up again and again for small business owners:

• What to do when a top performer starts slipping

• Why hiring is still tough (and how to keep the people you already have)

• Ways to manage rising labor costs without cutting jobs

• Why “at-will” doesn’t mean risk-free terminations

• A cautionary tale about culture gone wrong

• Plus a few quick-hit Q&A items from the inbox

Let’s get into it.

Every small business owner has been here: your best employee - the one you counted on, the one who never missed a beat, suddenly isn’t the same.

Missed deadlines. Work that needs re-doing. Silence until you chase them down for updates.

Meanwhile, your other employees are getting frustrated because they’re picking up the slack. Customers are starting to notice things falling through the cracks. And you’re spending more time fixing mistakes than growing your business.

The natural reaction? Frustration. Disappointment. Maybe even panic.

But here’s what I’ve learned in 30+ years of HR: in most cases, there’s a reason behind the slip. And it’s usually something you can address.

Sometimes it’s:

• A system no one was ever properly trained on.

• A “busy season” that never really slowed down.

• A job that quietly doubled in scope without anyone acknowledging it.

The fix starts with curiosity, not blame. Sit down with your employee. Ask what’s changed. Look at the workload, the tools, and the expectations.

Once you uncover the real issue, you can take action:

• Reset expectations.

• Provide the support they actually need.

• Or, if it’s truly not the right fit anymore, make the hard call.

The important thing is not to ignore it. Performance issues don’t magically resolve on their own. And if you wait too long, the impact on morale and customer experience grows.

The latest NFIB data shows that more than one-third of small businesses still have unfilled jobs. And many say the real problem isn’t lack of effort - it’s that qualified candidates just aren’t out there. Add rising labor costs to the mix, and it feels like a no-win situation.

Here’s the good news: the fastest, most affordable way to grow your business isn’t always through hiring. It’s through keeping the great people you already have.

Retention isn’t about ping-pong tables or free snacks. It’s about making your employees’ work lives better in ways that matter. Think about:

• Skill development. Invest in training so your people can grow and bring more value.

• Clarity. Make sure job roles are clear and expectations are realistic.

• Flexibility. Even small scheduling adjustments can make a huge difference for retention.

• Appreciation. Recognition goes further than most owners realize.

Hiring is expensive. Recruiting, onboarding, training…it all adds up. Retention strategies usually cost far less, and they build loyalty in the process.

If hiring feels out of reach right now, shift your focus. You’ll save yourself time, money, and stress.

Payroll is one of the biggest expenses for small businesses, and rising costs are squeezing owners everywhere.

But before you start cutting hours or staff, take a look at scheduling. Are you paying for hours you don’t actually need? Are you scheduling “just in case” coverage that rarely gets used?

Small tweaks here can make a big difference.

• Match staffing to demand. If your busiest times are Friday nights, don’t overstaff Tuesday mornings.

• Offer flexible schedules. This helps retain good employees who might otherwise leave - and replacing them costs more than keeping them.

• Cross-train your team. A well-trained employee who can handle multiple roles gives you flexibility and reduces overtime.

It’s not about slashing jobs. It’s about running smarter.

Many small business owners believe that because their state is “at-will,” they can let someone go at any time without consequence. That’s not quite true.

At-will does mean either party can end employment at any time. But it doesn’t protect you from wrongful termination claims. Issues like discrimination, retaliation, or sloppy documentation can still land you in hot water.

The safer path is prevention:

• Set expectations clearly from day one.

• Put probationary periods in writing.

• Hold regular check-ins.

• Document concerns early and consistently.

If things don’t work out, you’ll have the documentation to show that you acted fairly and legally.

Not long ago, a Culver’s franchise faced serious legal action after employees reported harassment and discrimination in the workplace.

This wasn’t one bad apple. It was a breakdown of culture. Complaints ignored. Junior managers untrained. Employees using racial slurs and targeting coworkers with disabilities without consequences.

For small business owners, the lesson is clear: culture doesn’t fix itself.

Here’s what to take away:

• Make it safe to speak up. Employees need a clear, judgment-free way to raise concerns.

• Use plain language. Policies written like a law textbook don’t connect. Use examples your team understands.

• Train your managers. If you promote from within, make sure those new leaders get the tools to handle people issues.

Culture problems don’t just hurt feelings. They hurt your reputation, your ability to hire, and ultimately, your bottom line.

Q: What if an employee refuses to do a task that isn’t in their job description?

If the task is reasonable and tied to their role, you can expect it. Talk through why it’s needed. If the role has genuinely shifted, update the job description so everyone is clear.

Q: Can I delay a start date after offering someone a job?

Don’t make it official until you’re certain. Keep good candidates warm by expressing interest, but wait to set dates until the role is viable.

Q: Do part-timers get the same benefits as full-timers?

Not legally required. Some businesses prorate PTO or offer smaller perks as a way to be fair and competitive. The key is consistency - no one should feel singled out or misled.

The HR side of running a small business can feel like a distraction - until something goes wrong. Then it’s all you can think about.

Whether it’s underperformance, retention, scheduling, or culture, the sooner you tackle these issues, the better off your business will be. None of this has to be overwhelming. The key is breaking things down into practical steps you can take right now.

And if you’ve got an HR issue that’s keeping you up at night? That’s exactly what my HR SOS Session is for. In one focused hour, we’ll cut through the noise, figure out the real problem, and leave you with a clear plan of action.

Because the truth is: every minute you spend tangled up in HR problems is a minute you’re not running and growing your business. Let’s fix that.

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