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5 Tips To Help You With HR Issues In A Small Business

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An effectively run Human Resources Department contributes to increasing a small business’ productivity and boosting employee morale. The responsibility for recruiting and hiring the best people rests with human resources. To ensure a small business' success there are 5 common mistakes small business Human Resources departments should avoid.

Hiring a Candidate Too Quickly

Sometimes HR fills vacancies too quickly. During a survey 1,620 people working in human resources reported making hiring mistakes that cost their employer in excess of $50,000. That figure is based on losses in productivity, damaged relationships with clients, reduced employee morale and hiring a replacement.

To avoid hiring mistakes an HR department should provide a clear and detailed description of the position’s requirements. Instead of one interviewer take a team approach to candidate interviews. Explore whether or not a candidate's work-related beliefs and values are consistent with those of the company.

Bosses Don’t Maintain a “Professional Distance”

Being a small business can create a certain intimacy between supervisors and subordinates. An effective boss doesn't have to be cold and aloof in dealing with subordinates. By the same token, supervisors shouldn’t be so overly friendly and easy going with their subordinates as to undermines the supervisor's authority.

Not Properly Classifying Employees

Nobody wants to run afoul of the IRS. Companies can avoid trouble with the IRS by knowing the difference between an employee and an independent contractor. Accidental employee misclassification can result in the IRS exacting a penalty equaling 15% to 20% of the employee's compensation.

A contractor has complete autonomy in the way they go about their work. A private contractor manages his/her own operating expenses. A private contractor doesn't receive benefits or other compensation available to company employees.

Not Communicating Clearly With Employees

A small business' HR department can get so bogged down with responsibilities like HR document management that communication with employees suffers. Human Resources should develop and follow a plan for clearly communicating with employees. Management knowing and understanding what is going on within the company doesn't guarantee that employees have the same knowledge. Always make sure staff understands what they have been told. After relaying information have staff members repeat it back to you.

Not Investing in Employee Training

It is "penny wise and dollar foolish" for a small business to think it is saving money by not investing in proper employee training. Let us say a small business hires an employee at $38,000 a year. If that employee doesn't work out for lack of proper training it will cost 16% of the outgoing employee's salary, over $6,000, to find a replacement for that employee.

New employees need time to become familiar with the way a company operates. A training program should be in place and new hires should be assigned a mentor within the company. An investment in training is an investment in an employee's success. An employee's success, in turn, becomes the small business' success.

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