Small and medium-sized businesses (SMBs) have a lot to deal with – from sales and marketing to finance and human resource management. Unfortunately, ignoring day-to-day operations like HR management can increase the risk of errors which can lead to penalties and costly lawsuits.
Here we present a few small business HR mistakes to avoid.
Lack of A Proper Hiring Process
Recruitment is a major challenge for SMBs; a single bad hire can cost them tremendously and can adversely affect their production levels, performance, and morale. Businesses should maintain a standard procedure for hiring and conducting interviews and must stick to it. They need to make sure that the job description is clear and concise before publishing it. Apart from the technical skills, HR recruiters should make sure that a prospective hire would fit in with your organization’s culture. An investment in branding can also make your company more appealing to the best candidates.
Misclassifying Employees
One common mistake many SMBs make is misclassifying employees. It might be more cost-effective for businesses to hire contract employees since they won’t have to offer benefits or pay payroll taxes. However, it can get them into trouble with the IRS and result in penalties if the contract employees are treated as actual employees. Businesses should be familiar with the employee classification system and make sure that employees are classified correctly.
Ignoring Compliance
One of the most challenging aspects of running a business is keeping up with state laws. Employers must exercise diligence when determining the correct classification (non-exempt versus exempt) status for the workforce. Take time to identify what regulatory agencies govern your industry and what laws must be followed.
Inadequate Training
Training your new hires is a valuable investment in the future of your company. By including training in the onboarding process, your new hires would become fully engaged and understand how to use their skills to best benefit the business. Organizations that spend on training also get an indirect benefit – employees who feel they are valuable and capable of doing more for your organization.
All new hires need orientation to their surroundings. Even if you’re hiring someone who’s experienced, every workplace does things differently, so it pays off to give new hires a lay of the land. Moreover, investing in your employees’ development reduces turnover and improves morale.
By identifying and rectifying HR mistakes before they become serious problems, you can protect your business from costly legal claims – a robust HR platform can help in achieving this.
