"Why Small Businesses Need HR Policies: Debunking the โToo Small for HRโ Myth"
"It's okay, we don't need Employee Handbook."
I often hear this from SME founders and business owners: โWe only have 10 people, donโt need formal HR policies, right?โ
โ ๏ธ ๐จ๐ป๐ณ๐ผ๐ฟ๐๐๐ป๐ฎ๐๐ฒ๐น๐, this belief is one of the biggest mistakes businesses make.
In reality, the smaller your team, the more essential it is to have clear HR policies in place.
๐ช๐ต๐? Because in a small team, every person matters and one misstep can affect your entire operation.
๐งจ A real case I dealt with
A company had no formal leave policy, an employee went on leave for two weeks without communicating, assuming unpaid leave, the boss assumed job abandonment. Jialat!
The situation escalated quickly:
โ Miscommunication
โ Frustration on both sides
โ Potential Dismissal case
โ Resignation
โ Potential legal risk
All of this could have been avoided with one simple document, a clear leave policy.
โ Why even a small company needs HR policies?
Without policies, you are running your business based on assumptions. And assumptions are dangerous when money, productivity, and people are involved.
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Hereโs what clear HR policies provide:
๐ ๐๐น๐ฎ๐ฟ๐ถ๐๐: Employees know whatโs expected; no guesswork
โ๏ธ ๐๐ฎ๐ถ๐ฟ๐ป๐ฒ๐๐: Everyone is treated consistently and equally
๐ก๏ธ ๐ฃ๐ฟ๐ผ๐๐ฒ๐ฐ๐๐ถ๐ผ๐ป: Reduces legal and compliance risks
๐งญ ๐ฆ๐๐ฟ๐๐ฐ๐๐๐ฟ๐ฒ: Helps managers make decisions without bias
๐๏ธ ๐ฃ๐ฟ๐ผ๐ณ๐ฒ๐๐๐ถ๐ผ๐ป๐ฎ๐น๐ถ๐๐บ: Improves your brand image to clients, partners, and future hires
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๐ What policies should SMEs start with?
You donโt need a 50-page HR manual. A lean, clear 5โ10 page document will do.
Start with:
โ Working hours & attendance rules
โ Public holiday & leave entitlements (annual, medical, unpaid)
โ Code of conduct & disciplinary procedures
โ Probation, confirmation & termination process
โ Salary & benefits information
โ Workplace safety, harassment, and grievance procedures
โ Grievance & Escalation process
Even if your HR is managed by the boss or a finance team member, these guidelines are non-negotiable.
๐ก Pro Tip : Donโt wait until thereโs a problem, remember >
– A poor performer cannot be terminated without due process
– A team member can file a claim due to harassment
– Disputes can arise over unpaid overtime
๐ฅ HR policies are not about control. Theyโre about clarity and consistency.
And the bonus? When your business grows & scale (it will!), having policies in place means:
– Smoother onboarding of new hires
– Better accountability from staff
– Better HR Management
Small team โ no rules.
Small team = clearer rules to protect what matters most.
Need help setting up your basic HR policies?
Letโs talk. Itโs one of the ๐ฏ๐ฒ๐๐ ๐น๐ผ๐-๐ฐ๐ผ๐๐, ๐ต๐ถ๐ด๐ต-๐ถ๐บ๐ฝ๐ฎ๐ฐ๐ ๐๐๐ฒ๐ฝ๐ one can take.
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This article originally appeared on LinkedIn by Kevin Goh โ Director. You can read the full post here. Adapted and shared with permission.
