5 Human Resources Mistakes Small Businesses Commonly Make

Small businesses and startups beginning to expand their company and take on new hires need a solid HR plan in place to ensure their internal systems can support the bigger team.

The problem is, when budgets get tight, smaller businesses have to make a concerted effort to do they best they can with what they’ve got.

Falling behind on human resources, however, can come back to haunt small businesses when requirements aren’t met and fines and fees come along to cripple your growth.

For those who want to build their HR strategy beyond avoiding the complications that come with meeting regulations, it’s time to take a proactive approach. Here are 5 mistakes small businesses commonly make when putting together their human resources strategy:

Falling behind on proper employee documentation

Accurate and complete employee documentation is one of the most important pieces of human resources. In addition to the internal benefits of having this information logged for your company’s reference, agencies like the Department of Labor, the IRS, and Immigration Services routinely double check employment records to ensure requirements are being met.

While the specifics of documentation can differ from state-to-state, generally speaking, a proper set of employee documentation should include tax and social security information, residency status, legal residence and mailing address information, and any information about their job classification.

Inaccurate overtime pay

Overtime can be dense, complicated area of HR that spells disaster for many small businesses and startups. To make it even more complex, many states have radically different laws in place between each other.

Job classification plays a big role in figuring out overtime. Most of the time, workers operating on an hourly pay schedule qualify for overtime once they start working more than 40 hours per week. Salaried workers are often exempt from this, unless classified specifically as a non-exempt employee.

If this sounds like it’s confusing quagmire of laws and regulations, for many, it is. One of the most important ways to make sure you’re staying on top of HR is to get your staff trained in both federal and state laws that apply to the workers inside your company.

Forgetting to put together an employee handbook

Informative employee handbooks are important for two big reasons. First, they communicate to workers what their rights are according to state and federal labor laws. Second, they make the company’s expectations clear by providing a go-to reference when questions arise.

If you find yourself struggling to deal with employees who aren’t complying with company policy, a handbook is the perfect way to assure no one can argue they weren’t aware of what is expected of them as an employee.

When the unfortunate situation of termination arises, handbooks written in compliance with federal, state and local laws also give businesses a legal justification––protecting them from discrimination laws, and other potential accusations.

Oversimplified job descriptions

Poorly written job descriptions (or the lack of any at all) can lead to workers not knowing exactly what role they’re supposed to play in your company. While some small businesses and startups certainly make the most of their employees ideas for moving forward, not having clear roles defined throughout the company can quickly lead to an organizational nightmare.

Take the time to sit down with managers and employees carefully lay out solid job descriptions for each position inside the company.

While most of these problems can be avoided with vigilance and proper documentation, if you find yourself overwhelmed by HR responsibilities, we’re here to help. Contact us today and get more information about how we can help.

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