Because:

Small and medium enterprises don’t have the capacity to hire HR teams.

Small and medium enterprises have a mind-block that they need an HR only when they reach a considerable size.

Have you ever seen an HR in a beauty parlor or a restaurant? No.

Why?

Because of these operational difficulties that small and medium enterprises face regarding appointing HR teams:

1. No dedicated HR manager

When it comes to appointing a dedicated HR manager in micro industries, the owner doesn’t have enough time to get into the hiring process. Undoubtedly, hiring HR managers is a lengthy process that requires both time and efficiency.

When a startup is at the initial stage, the founder or CEO has to run multiple errands to take his business to the next level. The founder feels that he has a hundred other important aspects to look into to enhance his business.

However, here, the founder fails to realize that maintaining an HR team can be a way to make his business run systematically as well as take care of the employees of the company.

2. Track time and attendance

Another botheration of most small and medium-sized enterprises is they do not have adequate time to pay attention to employee attendance and timings.

Every employee gets paid based on the number of days he works. Not maintaining an attendance record and the employees’ arrival and departure times means you’re sure to struggle while paying the salary to the employees.

Due to the lack of an HR manager, small and medium enterprises face difficulties in keeping an account of employee timings and attendance.

It’s not that the founders of MSMEs don’t want to maintain these things. They’re bogged down with so many other essential aspects of the business that they simply don’t have adequate time.

3. Calculate and pay the salary

The founders of MSMEs struggle to calculate and pay the salaries of their employees.

Firstly, the salaries of the employees depend on the number of days they’ve been present in a month. Secondly, since the founders of the MSMEs take care of everything in their business right from the beginning to the end, they barely have time to calculate the salary of each employee and pay them accordingly.

According to them, performing this hectic task of noting everyone’s attendance daily, calculating their salaries, and paying them individually at the right time is an extremely tedious process.

4. CEO = Chief Everything Owner

The CEOs and founders of small and medium enterprises don’t have adequate funds to hire an HR team.

As a result, right from inventory to client management, employee management, business marketing, and advertising, the CEO takes care of everything.

In certain cases, again, the CEO of a startup feels that the company would hire an HR only when it has reached a considerable stage.

Therefore, from being the chief executive officer, the CEO becomes the chief everything officer. This leads to a ruckus in company management.

5. Comply with labor and tax laws

Lack of adequate knowledge about labor and tax laws significantly makes the founders and CEOs of small and medium enterprises ignore their employees.

The landscape of labor and tax laws is ever-evolving. Failure to meet these regulations can lead to legal repercussions and damage to the company's reputation.

Here, either the company has to hire efficient HR managers or learn more about the labor and tax laws.

6. Keep employee records

Above all, the existing HR managers employed in small and medium-sized enterprises maintain employee records manually.

When it comes to manual operation, it is sure to have errors.

Suppose you have nearly 20 employees working for you. Now, maintaining the record of each one of them manually is a time-consuming process.

Besides, doing this every day without creating any errors is a tedious task.