What Types of Mistakes Do Small Businesses Make Regarding Human Resources?
Dealing with human resource issues can be challenging at times for any company but especially smaller companies. Quite often, smaller companies just don’t have the expertise or resources when it comes to making sure mistakes aren’t being made when it comes to handling employees. Management and business owners are focused on growth, customer relations, and being as profitability as possible. HR mistakes can cost companies a lot of money and many don’t realize they aren’t compliant or unaware what HR laws apply to them. It’s important that you make sure you avoid these common mistakes which can cost you a lot of time and money if they aren’t addressed properly.
1. Not Having An Employee Handbook – Employee handbooks are important for small companies too. A small business owner may not see a need for one to exist there are many reasons why one should. The employee handbook communicates expectations about how employees are to act and what happens if they don’t meet those expectations. They also help protect employers. Clear policies and procedures can help prevent liability. A well-written handbook can protect an employer as it sets forth policies and procedures when issues arise which will help anyone from being surprised by the outcome.
2. Job Descriptions That Are Missing or Vague – Quite often job descriptions are not clear or accurate. Job descriptions are a critical tool for companies. They allow managers to gauge employee performance and without them your employees and managers don’t know what they are responsible for. They can help with hiring as well because a clear job description will help identify ideal candidates that can meet the basic requirements of that job.
3. Making Sure Your Employees Are Classified Properly – Many small companies don’t know the difference between a full-time employee, part-time employee, contract worker and independent contractor. There are strict laws that apply to an employer regarding whether to pay someone an hourly rate or on a salaried basis. Also, many companies think they have contracted with an independent contractor only to find out that isn’t the case. You need to check with a tax professional or the department of labor to make sure you aren’t making costly mistakes. Getting this right will protect you from getting sued from an unhappy employee that may try and sue for past-overtime pay or back wages.
4. Incomplete Documentation– One phase that applies here is “document, document, document! It is very difficult to discipline or fire an employee without the proper documentation. It is also important to address any employee issues right away rather than wait. After it is addressed it is important to document what happened and come up with a correction plan so the employee knows how to improve. This includes everything from performance evaluations, raises and time off requests. If you aren’t documenting properly, you’re setting yourself up for legal issues. Firing an employee without due diligence can be very costly.
5. Not Understanding Basic Employment Law – Many federal and state laws are not understood and some employers don’t think they apply to them. This can be a very costly mistake. Some of these laws include: Age and gender discrimination, overtime and minimum wage requirements, discrimination, family leave, pregnancy discrimination, military leave, immigration and safety in the workplace. It is important to keep up to date with these laws as well as changes that happen. It’s your duty to stay on top of new legislation. These laws and regulations do change often.
These are five common HR mistakes that happen but there are others like hiring the wrong person for a job which can be costly in many ways including workers compensation costs, finding replacement employees and potential lawsuits. Many of these common HR mistakes can easily be avoided by dealing with them before they become problems.
Take time to find a reliable resource you can depend on. UNITEL HR Solutions can be your trusted resource to help you stay compliant and avoid many of these mistakes so you can focus on your day to day operations. This will help you become more profitable and having productive and happy employees is a key function.