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Do you trust the cloud for confidential data? Are you trading feedback with your employees? Are you making contract workers feel like they're part of the team?

These are just a few of the issues that companies big and small are grappling with this year.

And while big organizations with human resources departments are hard at work on these issues, small and medium-sized companies without dedicated HR staff may not be giving them much thought. Fortunately, trends in technology are making it easier to follow the lead of big employers, experts say.

Here are hot-button issues that entrepreneurs and managers need to be aware of:

Getting comfortable on the cloud

The price of online human resources services has dropped to the point where they are economical for small businesses. And while entrepreneurs might feel reluctant to put personnel information on the cloud, in fact, cloud-based services can provide much higher security than the traditional paper forms kept in file cabinets, says Joanne Royce, a leadership trainer and principal of human resources consultancy Royce & Associates in Oakville, Ont.

Other HR functions that have become more convenient online are recruiting, orientation and training, she says.

Skype is especially useful in recruiting, Ms. Royce suggests. "It can be difficult to set up a mutual time for an interview and many people don't even have a home number any more," but Skype enables remote face-to-face meetings.

Using crowd-sourced advice

Online groups are handy, free ways for entrepreneurs to ask questions and seek advice about challenges they face, including human resources ones, as well as to meet other professionals, says Danielle Restivo, manager of corporate communications at LinkedIn Canada. Discussion groups on social media make it possible to tap into the experiences of fellow entrepreneurs for best practices and solutions to vexing issues.

For instance, startups and small business has become a dedicated discussion topic on LinkedIn.  An international small-business network there has more than 25,000 members worldwide.

Big brands in Canada and other countries are getting into the conversation by starting groups targeted at small business owners. Examples include Get Growing for Business, created by the Bank of Nova Scotia, and Canadian Business Community, started by Toronto-Dominion Bank.

Tracking performance on social media

Large organizations are using social media applications to provide ongoing feedback and manage performance thanks to inexpensive online apps, says Fiorella Callocchia, a human capital specialist for consultancy Deloitte & Touche LLP in Burlington, Ont.

"It can be as simple as asking a few basic questions to assess strengths, set goals and review where employees could improve and what you can do to help them," she says. From there, the apps can track progress toward goals.

It's part of a trend toward replacing annual performance reviews with more immediate tracking of goals and progress, Ms. Callocchia says. This technology is affordable particularly for small businesses, which may not have any performance management systems in place.

Managing contract workers

More businesses are hiring contract workers. A survey of 1,900 human resource managers by the Human Resources Professionals Association found that 90 per cent manage contract workers, up from 75 per cent when a similar survey was done in 2010. The figure was just 60 per cent in 2002.

While 80 per cent of the HR managers said they had policies to handle legal issues, such as contracts and integrating temps into their work forces, the rest had nothing in writing, says Kristina Hidas, vice-president of HR research and development for the Toronto-based HRPA. The majority of those without a policy are small and medium-sized businesses.

Policies should cover start and end dates and such specifics as when contract workers can participate in company meetings and events. "It's important for motivation to have a consistent policy for all employees," she says.

It's also increasingly likely that contract workers will be ongoing members of the team, she says. "Another growing trend is that people are brought in on sequential contracts, so there is a possibility the contract workers will be working with the same people again."

Planning for growth

The business outlook this year is more optimistic than it has been in years, and now is the time to expand the business and your customer reach, says Hubert Kelly, president of the Toronto-based small business advisory company Murphy Business Canada.

This may mean it's the right time to hire for some companies.

"Most companies went through years of getting costs in line and preparing for a downturn based on what they were observing in the U.S. In general, everyone came through it relatively unscathed and better off because they were managing costs more tightly. Now, margins are better and the balance sheets are healthy to start the year," he says.

Challenges for 2013

Here are three HR areas where small and medium-sized businesses face hurdles:

Engagement: 42 per cent of employees believe their job does not make good use of their skills and abilities. They value meaningful work over retention initiatives.

Turnover: Employees with less than two years on the job and millennials (those 31 and younger) were much more likely than others to say they were interested in jumping to a new employer.

Leadership: Those who said they planned to stay with their current organization consistently reported high levels of trust in the corporate leaders.

Source: Forbes Insights survey of 560 employees done for Deloitte & Touche LLP

Facts and figures

  • 26 per cent of small and medium-sized businesses plan to hire, up from 21 per cent in 2012.
  • 15 per cent plan to take out new lines of credit to finance expansion.
  • 60 per cent of all employers report they are in better financial position than a year ago.
  • 40 per cent report sales have increased in the past six months.

Source: Harris Interactive poll of 2,600 hiring managers for

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