3 Common HR Mistakes Small Businesses Make

3 Common HR Mistakes Small Businesses Make

Small business owners are responsible for many tasks, which often leads them to wearing different hats multiple times in a day-sometimes even in an hour. It isn’t uncommon to find a business owner who is handling everything from sales to human resources. It’s inevitable that some things have to sit on the backburner, and many small business owners find human resources falling to the bottom of their lists until issues arise.

However, by being passive in managing human resources, business owners run the risk of making mistakes that can be costly. Costly by way of employee turnover, loss of productivity, decreased employee engagement and potential wrongful termination suits. Here are three common mistakes you could be making and how to fix them:

1. No Employee Handbook – or a Severely Neglected One

Although not required by law, it is highly recommended that you have an employee handbook in place. Providing new employees with a handbook will serve as a reference guide for common questions they might have on items such as benefits, PTO and work-place decorum and will consistently spell out behavioral and performance expectations across all positions within your organization.

If you don’t currently have an employee handbook or you haven’t updated yours in a few years, you should get started soon. Best practice is to review policies at least on an annual basis but staying current with local, state and federal laws will help assist you in determining when to amend a policy. Your handbook should include paid time-off policies, employee conduct expectations, sexual harassment policies and much more. With the popularity of social media, many employers now find it beneficial to their company to include a social media policy even if they do not have a social media footprint. Also, make sure you have them sign an employee acknowledgement page stating they received and understand the handbook for inclusion in their personnel file.

2. Hiring Candidates Based on Resume Only

Often times a prospective employee can look great on paper, but if you stop there, it could turn out to be a bad decision. Many companies are ignoring their company culture and are hiring based on job skills alone. While you certainly want someone who meets the minimum qualifications, you may also be looking for a creative, highly organized, tech savvy go-getter with excellent customer service skills.

You’ll want to ask questions that aren’t necessarily the usual suspects in an interview and ones that are focused more on behavioral responses instead of yes or no answers. If organization is important to the position, consider asking the candidate about specific methods they use to stay organized. Or have them tell you about an organization method that did not work for them and why it did not work. This can help you decipher problem solving and organization skills. You’ll also want to ask questions that are in line with your company’s values. If your company values community involvement, ask them about how they would get involved in the local community if given the opportunity. The key is to try and find out as much as possible about how that person will interact with the current landscape of your office, as well as position requirements. Good candidates will expect such questions and will in turn be asking you about your company culture; so be ready to answer.

3. Undocumented Employee Performance Issues

Every business owner will inevitably have to face the dreaded task of dealing with employee performance or behavior issues. Unfortunately, verbal warnings will not always lead to the employee correcting the problem so a more formal corrective action plan should be put in place. Documentation of the performance or behavior deficiency should be made along with a corrective action plan for the employee to follow to make sure they are in compliance with all company policies. Provide a face-to-face counseling session to ensure the employee is aware of your concerns, how to correct them moving forward and the risk of further disciplinary action up to or including termination if the desired outcomes are not met. Hopefully you will be able to abate any future performance issues or at least have solid documented proof in the event of termination.

While it is sometimes hard to find the time to be proactive about your HR needs as a small business owner, it is much better to get a handle on it now than wait for the fires to get out of control. If you have questions about your human resources needs and how we can help, contact us today for a consultation!

Posted In: Human Resources Consulting | Insights

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