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Are you one of those business owners who's focused on what's right in front of you? You know the type. You handle today's customer issues, tackle this week's deadlines, and somehow the months fly by without much strategic planning for the future.
Guilty as charged. It's so easy to let our good intentions for future planning get buried under the day-to-day operations. In fact, if you're like me, you might have just gotten a grip on 2025 only to look up and… well, surprise, it’s almost 2026!
Now that we’ve had a moment to let that sink in, let’s take a collective breath and reflect on this year.
As you know, 2025 brought no shortage of challenges to small businesses. It taught us some expensive lessons about what happens when HR takes a backseat to everything else.
Rising healthcare costs caught many businesses off guard and stretched budgets. The talent market stayed competitive, making good hires harder to find and keep. New compliance rules rolled out in multiple states, creating headaches for unprepared employers.
The businesses that have handled 2025 successfully are the ones that have learned how to balance short-term needs with long-term resilience. In this article, we'll share five critical HR lessons from 2025 that can help you build a stronger, more resilient business in 2026.
1. Budget Smarter Around Healthcare Costs
Healthcare continues to be one of the most significant expenses for employers. And in 2025, it hit small businesses particularly hard. Premiums and deductibles rose faster than wages, leaving many owners feeling trapped between protecting their bottom line and offering meaningful benefits.
And the frustration was real on both sides. Business owners watched their insurance costs climb while employees dealt with shrinking coverage and higher out-of-pocket expenses.
What Smart Businesses Learned
The most successful small businesses explored their options and got creative with what they could offer in benefit packages. Some looked at Minimum Essential Coverage (MEC) options for businesses under 50 employees. Others focused on high-impact, lower-cost benefits like flexible spending accounts or wellness programs.
Your 2026 Action Plan
Review your benefits strategy before renewal season hits. Even if you're not required to provide health insurance under the ACA, showing employees you care about their health and well-being pays dividends in retention and morale.
Consider these alternatives if traditional health insurance feels out of reach:
- Health reimbursement arrangements (HRAs)
- Wellness program stipends
- Telemedicine benefits
- Mental health support resources
The key here is to make an effort to show your employees that you care about their health and well-being.
2. Embrace Skills-Based Hiring
In 2025, many employers moved away from strict degree requirements and leaned into skills-based hiring. For small businesses, this shift opens up a much larger talent pool without breaking the bank.
Why This Matters for Small Businesses
When you limit your search to candidates with four-year degrees, you're competing with larger companies that can offer higher salaries and more comprehensive benefits. By focusing on skills, experience, and practical ability, you can identify strong candidates who may not have taken a traditional educational path but are well-equipped to succeed.
Your 2026 Action Plan
Update your job postings to emphasize must-have skills instead of credentials. During the hiring process, use assessments, work samples, or scenario-based interviews to gauge real ability.
For example, instead of requiring a "Bachelor's degree in Marketing," try "Demonstrated experience managing social media campaigns with measurable results" or "Portfolio showing successful marketing projects."
Skills-first hiring helps small businesses compete more effectively for talent without matching big company salaries. It also opens opportunities to build a more diverse and adaptable workforce, as people who've learned through experience often bring creative problem-solving skills that can't be taught in a classroom.
3. Double Down on Retention
Turnover was an expensive problem for many employers in 2025, but small businesses felt the pain the most. When one employee leaves a small team, the ripple effects are immediate. Workloads shift, customer service suffers, and remaining staff often feel overwhelmed.
"Quiet quitting" also resurfaced in 2025, reminding business owners that disengaged employees can be just as costly as those who leave.
Your 2026 Action Plan
Make retention a top priority. The most effective retention strategies require consistent attention, not big budgets. Here are a few to consider:
- Regular check-ins, also known as 1:1s or “stay” interviews, are valuable tools for understanding what your employees appreciate about their jobs and what might cause them to consider leaving. These conversations often reveal simple fixes that prevent bigger problems.
- Regular "meaningful" recognition is another low-cost, high-impact strategy. A genuine thank-you, public acknowledgment during team meetings, or a small reward program can go a long way toward making employees feel valued. The key is making recognition specific and timely.
- Growth opportunities are equally important. Even if you can't offer frequent promotions, you can invest in training, cross-training, or mentorship. Show employees you're committed to their development, and they'll be more likely to stay committed to your business.
4. Prepare for Compliance Shifts
Several states introduced or expanded regulations around pay transparency, paid leave, and workplace safety in 2025. While large companies often have legal departments or dedicated compliance teams to handle these changes, small businesses must find practical ways to stay current.
Compliance mistakes are expensive, but they're often avoidable. A missing wage posting here, an outdated handbook there, and suddenly you're dealing with penalties that could have been prevented with a little preparation. And while small businesses don't always have the luxury of a full HR department, being proactive can prevent costly mistakes. Taking time to address these things helps you avoid fines and also demonstrates to employees that your business operates with integrity.
Your 2026 Action Plan
Before January 1, conduct an HR compliance review. Here's a checklist to start with:
- Update your employee handbook to reflect current laws.
- Check that job descriptions include required salary ranges (if your state mandates pay transparency).
- Confirm your wage and hour practices align with federal and state rules.
- Review your leave policies against new state requirements.
- Update workplace safety protocols as needed.
Multi-State Considerations
If you operate in multiple states or have remote employees, pay extra attention to varying local requirements. What's legal in one state might not be in another, and remote work has made this more complex than ever.
5. Invest in Culture, Not Just Perks
Throughout 2025, many organizations discovered that perks alone weren't enough to keep employees happy. Free snacks, casual dress codes, and office games were nice extras but they did little to improve long-term engagement.
What Employees Actually Want
Employees consistently valued workplaces that offered:
- Clear, consistent communication
- Fair treatment across all levels
- Opportunities to contribute ideas and feedback
- Recognition for both individual and team achievements
- Psychological safety to take appropriate risks and learn from mistakes
Your 2026 Action Plan
For small businesses, culture can be your biggest differentiator. In a tight labor market, candidates are drawn to workplaces where they feel connected and supported over those that simply offer the highest salary.
For 2026, focus on creating an environment where employees feel safe to share ideas, concerns, and feedback. Encourage collaboration and celebrate both wins and lessons learned from failures.
This kind of culture is the foundation of a workplace where employees feel motivated to give their best. It costs far less than high turnover, and it pays dividends in performance, customer satisfaction, and word-of-mouth recruiting.
Your Path to HR Success in 2026
Planning for 2026 is about more than forecasting sales or tightening budgets. It's about preparing your workforce to adapt, grow, and thrive alongside your business.
These five lessons from 2025 can help small businesses build resilience and strengthen the employee experience.
Start with what you can control. Offer benefits that make sense for your size, focus on skills when hiring, make retention a habit, stay ahead of compliance changes, and invest in building a workplace culture where people want to stay.
Your people are your greatest asset. When you invest in them thoughtfully, you're investing in the future success of your business.
Ready to turn these lessons into action? At Whirks, we help small businesses like yours build stronger HR foundations without the complexity. Whether you need help with compliance, benefits, or building better hiring processes, we're here to support your success every step of the way.
Learn more about our People Services:
"What is Whirks People Services? Our Bundled Payroll and HR Explained."
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