Human Resources: Mistakes to Avoid for Small Business



Hiring the Wrong Person

When you’re searching to fill a position, you may be tempted to fill it as fast as you can with a candidate that might be underqualified. Someone who doesn’t acclimate to the company culture only leads to problems in the workplace. It eventually comes to the point where you will need to replace them and start the process all over again.


Some small business owners just don’t have the funds or even the time to do an extensive background check. But it’s a step that should not be avoided as your small business cannot afford to. We suggest asking behavioral questions during the interview to best gauge the candidate and setting clear and specific job descriptions.


Not Providing Job Descriptions

Setting “open-ended” job descriptions may seem like an easy win, however you are far better off communicating to your employees exactly what is expected at the workplace. You can never hire the right person if you don’t know what specific role and responsibilities are needed for the listed position.


Performance Isn’t Documented

HR managers must record and document all performance reviews, meetings, and issues to maintain information. If any problems arise, from job performance to attitude, you will then need to discuss it one-on-one with the employee to create a method of resolution. And everything, from the time the problem was noted all the way to your first meeting with the employee, must be documented! You need this information if you need to let the employee go and go through the official offboarding process, otherwise you’re susceptible to legal action.


Poorly Kept Employee Handbook

HR managers must keep a current employee handbook so it accurately reflects company policies and overall procedures. Additionally, it should include the discrimination policy, harassment policy, vacation requests, drug and alcohol policy. Background checks must reflect the most current federal and state laws.


The employee handbook is also only relevant if every single employee has access to it at any time or has a physical copy so that they may be able to remain on track with regulations. You must also have signed acknowledgment of receipt and understanding forms for every employee. Review your handbook annually for any changes in your company, as well as keeping it up to date at the state and federal level.


Ignoring Employment Laws

It goes without saying, but human resources for small businesses focuses on employment laws based on your business specific location. If you ignore or deliberately disregard the law then you are not protected from legal action or other problems that may eventually occur. You might want to consider putting together a corrective action plan.


Improper Classification of Employees

You must classify your employees properly: regular vs. temporary; full-time vs. part-time; as well as exempt vs. non-exempt. You have contract employees as well. Be sure to also include the rules in your employee handbook as the IRS has strict and severe guidelines that you must follow. With all of the above outlined, we now have an overall idea of what your human resources manual for small businesses should replicate. Please understand that this is a brief guide and we recommend having legal counsel go through all of the details to keep you compliant.

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Posted by John Locke