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EP #2 | Five Common HR Mistakes in Small Business (and How to Avoid Them)

grounded hr podcast grounded hr youtube channel Sep 25, 2025

Listen to the episode here

Running a small business is challenging enough without the added stress of HR mistakes. Yet so many business owners unknowingly fall into traps that affect compliance, culture, and confidence. In this episode of The HR Link: People-First Conversations, Amy Christopherson shares the most common HR mistakes in small business and how to avoid them, so you can lead with clarity and care.

 

From contracts to record keeping, Amy highlights the practical missteps that often go unnoticed until they create bigger problems. With warmth and people-first guidance, she explains how to put the right structures in place, ask the right questions, and reduce overwhelm. This episode is about giving small business owners peace of mind and the confidence to handle HR well.

 

In this episode, you’ll learn:

  • Why generic contract templates put your business at risk
  • How policies and procedures create consistency and reduce stress
  • Tips for handling tricky conversations with clarity and kindness
  • What you need to know about employee leave entitlements under Fair Work
  • How consistent record keeping protects you and your team

 

HR doesn’t have to feel complicated or overwhelming. By avoiding these common mistakes and putting simple, people-first systems in place, you’ll create a stronger foundation for your team and your business. With Amy’s experience as a heart-centred HR leader, you’ll feel supported, informed, and ready to move forward with confidence.

 

Resources & Links

Explore The HR Link: ā https://www.groundedhr.com.au/the-hr-linkā 

Free HR resources for small business owners:

 

šŸ‘‰ Follow The HR Link on Spotify and Apple Podcasts, and subscribe on YouTube, so you never miss an episode.

 

Transcript

ā€‹[00:00:00] Welcome to today's episode. Today I wanna talk about the mistakes that I see small business owners make all the time. Now, probably most of my clients who have come to me have probably made one of these mistakes that I'm gonna talk about today. And I'm not here to point the finger. I'm not here to, you know, make you feel bad.

[00:01:00] I am here to basically. Encourage you to ask questions Sometimes. Most of the time, small business owners don't actually even know that they've made a mistake. They thought they might have sought out the right advice, or they thought they'd sought out, sought out the the right, information. But that may have not have been the case.

And sometimes it's that they think that they have to find the information once, and then it's, it's done. And that's not necessarily the case either. So today I wanna talk about a few mistakes that I see most common in the clients who are booking calls with me. The first one of those is no proper contracts.

Now, there are free templates on the web that you can access, and I encourage you to ignore them. Do not download those contracts.

[00:02:00] They do not protect your business. They don't provide protections for your employees, and they most of the time are very, very generic and. There are so many, you've put your blood, sweat, and ideas into your business and I want you to protect that, and I also wanna protect your investment on your employees.

On the flip side, I also want employees to be paid correctly and I want them to eat to be transparent as to what their entitlements are. So contracts, I encourage you to get them drawn up and tailored for you. Not every business can have the same employment contract. There's different inclusions and clauses that we need to put in them depending on the industry that you are in. So that's my tip.

[00:03:00] If you have not had your contracts reviewed, I encourage you to book that in and prioritise that investment. Okay. The second mistake I often see is missing policies and procedures. Now, I know I talked about in the last episode that creating structure is really important and policies and procedures are important for creating consistency.

We don't want gigantic HR manuals that no one is ever gonna read. That is not the point. We wanna have structures in place that make it easy for employees and for you to find the information. That's correct. You are not gonna have a grievance procedure every single week, so it's not gonna be something that you store in your memory of how to handle that process, but.

It's gonna be so much easier to hand that handle that process if you have written a policy and a procedure about how that happens.

[00:04:00] So I encourage you, write one policy a month. If you can't afford the investment to get a HR consultant like myself to draft these for you, then I encourage you to prioritise putting that time in to writing those policies.

One month at a time, take baby steps and get them done. Start with the ones that you utilise most often. These might be your leave policies. They might be, your onboarding policies. It really does depend on your business, but encourage you to get them written. The third thing I often see is the avoidance of tricky conversations.

Now. I don't like these conversations either. They are not fun. They, I don't enjoy them, but I always go into these conversations with kindness.

[00:05:00] We need to realise that we are speaking to another human who are also probably nervous the same as we are. And having a tricky conversation is actually about how you set that conversation up, how you prepare yourself for that conversation.

And it's about delivering straightforward information, but in a kind way. Also, if you know your employee really well. You are going to know probably how they're going to react to that information, so you can prepare in advance for that. Whether that means sending them home early, providing them some space or working from home, or, there's so many different options of how you can show empathy.

But I really do encourage you to prepare ahead of time for these tricky conversations that may turn emotional. There are. Good ways and bad ways to deliver these tricky conversations, and I really encourage you to do it in the most human way possible.

[00:06:00] The fourth mistake I see so often is misunderstanding leave entitlements. So all employees, no matter whether they're casual or permanent, are entitled to some kinds of leave. Under the National Employment Standards, there are minimum entitlements there for casuals and for permanent employees. Then you layer over the top of that any award. Entitlements and you need to make sure that you are, you know, keeping track of these leave entitlements as well, and that they are accruing correctly inside your payroll system.

You need to ensure that people are encouraged to take leave. It's actually a really big liability if you have people to who collect leave over time and then don't use it. Really encourage your employees to utilize that. Leave really well.

[00:07:00] You know the, they will benefit from having the time away from work to clear their mind, to spend time with family and all of those kind of things.

And it's their entitlement. They're entitled to use that leave when they see fit. So I encourage you to keep an eye on your. Entitlements on your leave liabilities, and also encourage your employees to book their leave ahead of time. The final mistake I see so often is inconsistent record keeping. Now, by this I don't necessarily just mean.

Payroll data, payslips time sheets, all of those things that are legislated. I also mean records of conversations you've had. It's really difficult to performance manage a person later on down the track if you haven't kept good records of conversations you've had previously with them.

[00:08:00] So if you have a conversation with an employee either. Reiterate it in an email in writing so that it's very clear for the employee and yourself. Or keep a diary note. I have files of diary notes, which I may, some I may never need ever again, but to cover yourself, I encourage you to keep those diary notes. So start today. If you have a conversation, if you, you know, have a difficult conversation, make sure you get it down in writing.

Now I've experienced so many of these situations with so many different clients from really small clients right up to really big ones, and quite often, they've sought advice and it's been the incorrect advice.

[00:09:00] I've had clients who have been class who were utilising the incorrect award for their business.

Therefore, that meant that their employees were classified incorrectly. They were receiving incorrect allowances. Their pay rates might have not have been the same. Some of them had clauses in their contracts that were now made illegal things like pay secrecy and those kind of things, which you are not allowed to include in contracts anymore.

So I really encourage you to, have a look, ask questions, be inquisitive about the contracts, the documents, the information that you're collecting all the time. When you cover all your bases, when you do all of these, you know, basic things well, you are gonna be able to be more confident in your role.

You are gonna be more confident in the way that you lead your business when the. You are not having to make decisions all the time, and it's written on paper and it's a standard process, you're actually taking a lot of the overwhelm away from yourself.

[00:10:00] So I really do encourage you to do these things Today. I would like to offer you our free checklist. We have created a contract checklist for you to work through to review against your contract agreements and review whether there's things that you might be missing in your employment contracts. I'll make sure that the link for that is in our show notes, and I hope that you have found today's episode, super helpful.

If that's the case. Hopefully we'll catch you next time.

 

About The HR Link: People-First Conversations

The HR Link: People-First Conversations is the podcast for Australian business owners who want to manage their teams with clarity, care, and confidence. Hosted by Amy Christopherson, founder of Grounded HR, each episode brings you short, practical conversations that simplify HR and centre the humans inside your business.

Whether you’re hiring your first employee, navigating team challenges, or just want to make sure you’re “doing it right,” this podcast will give you the tools and reassurance you need.

New episodes are released fortnightly on Tuesdays at 7am. Subscribe now so you don’t miss an episode.

 

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Disclaimer

The HR Link: People-First Conversations is here to share people-first insights and education, not legal advice. Every business is unique, so we encourage you to seek tailored guidance for your own circumstances.

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