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5 Common HR Mistakes Small Businesses Make

As a small business owner, you occupy a lot of roles — marketing, accounting, and human resources — and in some cases you might handle it all. It can be easy to let the HR side of things slip by the wayside, especially when things appear to be running smoothly. However, it’s important to understand the strategic role that HR plays in growing and sustaining your business. The last thing you want to do is put your business at risk by making a mistake that negatively affects the bottom line. That’s why we’re sharing the most common HR mistakes that we see small businesses make. Read on, learn what you should avoid, and contact us if you have any questions.

Failing to have an up-to-date employee handbook

No matter how big or small, every business should have an employee handbook. Handbooks are essential for communicating rules, regulations, and policies that employees should uphold. Additionally, they outline the company culture and lay out the expectations of the employer. It’s important that this document is up-to-date because having a handbook that’s outdated can lead to miscommunication which can result in the violation of company policies.

Not displaying all required labor law postings

If your business has more than one employee, you are required by law to post federal, state, and OSHA mandatory posters. Failing to display all mandated posters can result in penalties, fines, and even lawsuits.

Not carrying unemployment insurance

Most businesses don’t know that they are required by law to carry unemployment insurance. “Unemployment insurance is an insurance by which people may receive benefits if they have faultlessly lost their jobs and meet other eligibility criteria.” This federally mandated program protects employees, and like the labor law postings regulations listed above, non-compliance on the employer’s side can result in fines.

Lacking an effective hiring process

Every business should have a strategic hiring strategy. Hiring mistakes can be detrimental to a growing business. In fact, according to the U.S. Department of Labor, a bad hire can cost you 30 percent of that position’s annual earnings. To avoid a bad hire, we believe that the best hiring decisions are made with input from a cross-departmental team. Additionally, the hiring process should be comprehensive — onboarding, training, mentorship, etc. — so that the new employee will be set up for success in their new position.

Not properly training new employees

You have a new employee, so now what? All of your employees should have a proper onboarding and training process. Investing the time to train a new employee is exceptionally valuable to the future of your business. Employees who are trained become more fully engaged and feel like they are an asset to the company. In fact, companies with engaged employees outperform those who are not by 202%.

As a small business owner you’ll make a few mistakes along the way. Having an HR team on your side will help you minimize those mistakes and will assist you with all of your human resources needs — allowing you to focus on what you do best. Schedule a free consultation or compliance review with us today.