Small business owners wear many hats including operations, finance, customer service, and so much more. With this, it can be easy to let HR fall to the bottom of the list. But ignoring HR doesn’t make it go away. Actually, overlooking basic compliance, documentation, and workplace policies can result in consequences that could threaten your entire business.
The Hidden Risks of Neglecting HR
When HR is not properly managed, the impact can be felt quickly — especially in small teams. Here are some of the top risks business owners may face when they don’t have a handle on HR:
1. Costly Fines and Legal Penalties
Canadian employment laws are complex and constantly changing. Without proper documentation and policies in place, businesses leave themselves open to legal scrutiny which is expensive, stressful and time consuming.
Failing to follow federal or provincial employment standards can lead to administrative penalties or even lawsuits. For example, British Columbia’s Employment Standards Branch can issue penalties of up to $10,000 per violation for non-compliance, such as failing to keep accurate payroll records or not providing proper termination pay (Government of British Columbia, 2024). Could your small business survive this type of penalty?
2. Increased Risk of Lawsuits
Without clear policies and procedures, disputes around harassment, wrongful dismissal, or discrimination can quickly spiral into legal battles. A single wrongful termination lawsuit in Canada can cost a business tens of thousands of dollars, even if the claim is unfounded.
And here’s the kicker: these claims often come down to a lack of documentation. No written warnings? No employment contract? You may not have a legal leg to stand on. These problems have simple solutions, but if not employed properly, you have a liability gap.
3. High Employee Turnover
When expectations aren’t clear or enforced fairly, good employees leave. A lack of HR structure can create confusion, resentment, and even burnout. According to a 2023 study by HR Reporter, 42% of employees who quit cited unclear expectations or inconsistent treatment as a top reason for leaving.
Replacing employees is expensive. Recruiting, onboarding, and training a new hire can cost up to 30–50% of their annual salary (SHRM, 2023). That’s a huge hit for a small team.
How Perk HR Helps You Stay Protected and Productive
You don’t need a full-tim in-house HR department to stay compliant and professional. At Perk HR, we offer fractional, flexible HR support designed specifically for small businesses. Here’s how we can help:
• Compliance-First Support
We ensure your contracts, policies, and practices align with BC employment laws—protecting you from costly legal missteps.
• Ready-to-Use Documentation
From employee manuals to termination checklists, we provide clear, professional tools you can use immediately.
• Custom Packages
Whether you need basic support or full-service help with hiring, documentation, or leadership, we’ll tailor a plan that works for your budget and goals.
• Monthly Check-Ins
We don’t just set it and forget it. Our monthly touchpoints keep your business on track and your team running smoothly.
HR Isn’t a Cost—It’s an Investment
Skipping HR might feel like you’re saving money in the short term. But the long-term risk outweighs the upfront cost. With the right support, you can avoid legal issues, retain your best people, and build a stronger business.
Don’t wait for a major problem to act. Let Perk HR help you build a compliant, confident workplace.
Let’s talk. Book a free call today and take the first step toward peace of mind.
References
- Government of British Columbia. (2024). Employment Standards Act Penalties. Retrieved from: https://www2.gov.bc.ca
- SHRM. (2023). Cost of Employee Turnover. Retrieved from: https://www.shrm.org
- HR Reporter Canada. (2023). Why Canadian Employees Leave Their Jobs. Retrieved from: https://www.hrreporter.com