Even though working for a small business offers many rewards, it also comes with some serious headaches. This is especially true for human resources professionals. They deal with a variety of situations that have the potential to cost the company thousands, or even millions of dollars. Here are the top six challenges the HR staff faces at small companies.

Hiring the Best and Brightest
Bringing in talented workers can be challenging for the HR team at a small company. Potential employees may believe that working for your firm will involve a heavier workload because you’re understaffed, they’ll have a smaller workspace, and there’s less money for professional development. It’s possible to offset some of this thinking by offering benefits that larger companies may not provide, including a flexible work schedule, the option to work from home several days a week, and less red tape in completing projects or securing approvals.

Filling Technical Positions
Nearly every company has at least a few specialized positions. As an HR professional, you need to fill these spots with employees who have a specific skill set. For example, you may be on the lookout for an IT professional who has extensive experience with creating a secure network. Depending on the industry in which your company operates, you may have staff positions that require you to hire people with certain certifications, licenses, or training. Many workers who have these specialized credentials may have their choice of jobs, making it challenging for small businesses to attract applicants.

It may be a good idea to partner with a community or technical college in your area to help meet your hiring needs. Administrators at these institutions are often open to partnerships with small businesses because they want to ensure they’re cultivating a regional workforce that’s suitable for local companies.

Keeping Talented People
Small firms may be able to attract talented millennials who don’t yet have enough experience to work for a Fortune 500 company. However, these employees may be ready to move on after only two or three years. This kind of turnover costs the company and results in a loss of productivity, knowledge, and continuity. There’s also the cost of training the new people you hire to replace those who leave. One way to combat frequent turnover is to offer advancement opportunities for these overachievers to keep them engaged and, well, overachieving.

Maintaining Confidentiality
When you’re dealing with a smaller staff, you may encounter people who want to know everyone’s salaries, disciplinary actions, and incentives. For example, a retail company that manages payments with Sage may discover employee fraud is an issue. Not everyone will have access to this system that gives a comprehensive view of money that comes in and goes out. Yet, if the wrong person finds out there’s suspected fraud, the rumors will fly and employee morale will suffer. Combat this situation by stressing to your employees why it’s important to keep their own information confidential. Then only give access to the electronic payment system to a few trustworthy individuals so that they can help you manage, view and process your businesses’ cash flow.

Preparing for Possible Litigation
Even though all companies are potential targets for employees looking to sue, small businesses are especially vulnerable to lawsuits alleging unfair and discriminatory practices. Some disgruntled employee may perceive that the company without an in-house legal team will be eager to settle rather than go through a lengthy court battle. You can defend against this kind of situation by keeping meticulous documentation showing fair treatment and consistent application of company policies.

Providing Legal Documentation
Every business, regardless of its size, is responsible for following applicable federal and state regulations. The HR staff needs to be prepared for the possibility of an audit from the U.S. Department of Labor. This time-intensive process becomes a little less daunting if you have up-to-date records showing that your company is complying with the law. Impress upon your company’s leadership team the potential cost saving that comes from maintaining records as a matter of doing business rather than having to scramble if there’s an audit.

Human resources professionals at small companies need to anticipate these challenges. By being proactive in handling some of these issues, you can save your company time and money. What are some of the biggest challenges you’ve faced at your company?