4 Costly Small Business HR Mistakes

Employees can be the heart, soul, and backbone of your small business.  But if you don’t have any human resource plans in place, employee challenges can also become a drain on you and the company.  Being prepared for human resource issues is a smart way to protect yourself from unnecessary expenses (or worse, litigation), no matter how large or small your staff. Take a look at the following to see if you’re making any common HR mistakes.  If so, it’s time to take action to better manage your employees and protect your bottom line.

#1 – Hiring Too Hastily

Hiring mistakes can spell trouble for a business, and being overly hasty in bringing a new person on is usually at the core. The best way to make sure you’re hiring the right employee is to start with a solid job description – one that includes required qualifications, job duties and company information. Being as specific as possible in what you’re looking for helps weed out unqualified candidates right away. Another item to consider is how well a potential employee fits into your company culture. Even a candidate with an impressive skill-set can be one you regret if he or she doesn’t mesh well with the team. To make sure you’re not only getting a person who can do the job, but one who plays well with others, involve more people in the interview process.  And never skip the reference check. You might learn a lot more than you think.

#2 –  No Employee Handbook

Regardless of size, all companies need an employee handbook. A custom handbook not only answers routine employee questions, it outlines what you expect from an employee in terms of performance and conduct. By clearly defining policies, procedures and expectations, you are also protecting against certain claims an employee may bring forward. But simply having a handbook isn’t enough. Employees should sign a form acknowledging they’ve received the handbook, and have read and understand it. It’s also important for small business owners to update the handbook regularly and revisit it with their employees periodically.

#3- Ignore (or Misunderstand) Employment Laws

It’s crucial that businesses are aware of employment laws and regulations and comply with them accordingly. Otherwise, you could find yourself in a sticky legal situation. What’s more, many small business owners may not know that certain employment laws depend on a company’s size, including EEOC requirements, and Department of Labor and OSHA requirements. When it comes to employment laws, ignorance is not bliss. Be sure to stay up to date on these and all other employment laws to avoid costly mistakes in the future.

#4 – Fail to Document and Properly Address Performance Problems

For a business owner or manager, addressing a problem employee can be frustrating. Maybe you think you’re too busy, or you hope that the employee will just shape up on their own. When the problem persists, however, you’ll need to take action.  Having a performance plan will help you defend your actions. This plan outlines performance problems professionally and details the behavior you need to address. By properly documenting employee performance and writing out a plan of recourse should the behavior continue, you have a paper trail if you need to ultimately let the employee go, as well as a legal leg to stand on if you need it.

It’s easy for small businesses to put human resources on the back-burner when business is running smoothly. But when the ride gets bumpy, having a solid working knowledge of HR best practices in place can make all the difference.