[This article was written by Craig Middleton.]
One of the most important assets of a small business is its human resources. However, due to budget constraints, most small businesses do not have an HR department, and instead, relegate that job to the owner of the business. And because they’re not well versed in human resource processes, a lot of small business owners face a myriad of HR issues regarding hiring, training, management, and documentation. HR is one of the more significant aspects of the business, it is, therefore, crucial that you recognize these issues and learn how to avoid them. The following are the top four HR mistakes that small businesses make, and how to avoid them.
- Inefficient Hiring Strategy
When it comes to getting workers for their enterprise, small business owners typically make mistakes such as penning down poor job descriptions that attract lackluster talent or even hiring straight out of their family and friends, with total disregard to the expertise needed. Moreover, there is usually lack of a proper interview process. A
CareerBuilder survey revealed that a single bad hire could cost the business as much as $50,000.
To avoid such outcomes, ensure that you create accurate and clear descriptions that aim to attract quality talent. Include any relevant information – such as must-have qualifications – so you can narrow down your target focus.
The next thing is to have a proper interviewing system. This will help ensure that you only hire talents that are the right fit for the company.
- Improper Employee Onboarding
Onboarding is the process of integrating a new employee into the company by equipping them with the necessary skills and knowledge that allow them to be effective members of the company. When you do not have a proper onboarding program, the new workers are forced to ‘wing it’ as they do not want to appear incompetent. And because they are learning on the job, they bound to make a lot of mistakes, some of which can be costly. As such, the
importance of employee onboarding cannot be overstated.
- Not Having a Comprehensive Employee Handbook
An employee handbook is a document that outlines the rights of employees as well as what is expected from them by the employer. Therefore, your employees will always know what’s right and what is wrong at all times.
By not having this document, your employees will not have a code to adhere to, thus giving rise to discipline and performance issues.
The benefit of an employee handbook is that it gives your business legal justification for terminating an employee, thus offering you protection against a potential lawsuit. It is also an excellent tool for evaluating employee performance. Moreover, employee handbooks are easy to create .
- Poor Employee Documentation
Proper employee documentation is not only a good business practice but is also a legal requirement. Improper documentation, therefore, is likely to get you into trouble with the IRS, Department of Labor, and more.
Proper documentation contains details such as an employee’s residency status, their job classification, social security and tax information, mailing address or legal address, and other types of information that the law requires.
If the data you have concerning this information is incomplete or incorrect, you stand to face significant financial penalties in addition to legal action.
Keeping this documentation up-to-date can be an arduous task. This is why small businesses need an HR document management software. This software stores all sorts of employee documents in an easily retrievable electronic format. Thus, their W-4s, insurance, resumes, requests, expense reports, and other critical documents can be stored in a proper database that allows you to make necessary changes with ease. The management software also eliminates the need for physical files and storage space while increasing the security and confidentiality of your employees. It also ensures top-notch compliance to local, state, and Federal regulations.
Due to the lack of a dedicated HR department, small businesses often commit mistakes that not only affect their productivity but also have legal implications. By following avoiding the above HR mistakes using the prescribed solutions, you should witness positive changes in efficiency and productivity.