I was recently asked to give a talk to a group of entrepreneurs on the biggest HR mistakes that companies make. In my experience of doing HR work for over thirty years, and from running a consulting practice for the last fifteen years, the biggest HR mistakes companies make are as follows:
1. Not keeping up with employment laws
Running a business requires wearing many hats. Add to that keeping up with new state and federal employment regulations, and who can manage? Recent changes like “ban the box,” which prohibits most New Jersey and some Pennsylvania companies employing fifteen or more employees to make any inquiries about a job applicant’s criminal record during the initial application process, and new federal overtime rules that raise the salary threshold for exempt workers to an annual salary of $47,476, require changes in how you do business.
2. Not keeping up with your employee handbook
Every business, no matter the size, should have an employee handbook that outlines workplace rules. Even if you never had a single employee complaint yet, you may have one at some time, and a complaint policy can help you work through the issue. Even if you have had no problems with employees abusing drugs or alcohol in the workplace, it might happen, and a drug and alcohol policy can protect you. And, even if your assistant has not complained about the bad experience he/she had with your best client to his/her Facebook friends, he/she may, and a social media policy can outline your stance on this.
3. Not keeping employee files properly organized
The Lindenberger Group often conducts HR audits for our clients. One common issue we find is that I-9s (which verify employee identity and work eligibility in the US) and health benefits information are not kept separate from the employee file. Health benefits information needs to be separate per the Health Insurance Portability and Accountability Act, otherwise known as HIPPA. Keeping I-9s and health benefits information separate is required by law and not doing so can result in fines.
4. Not hiring people carefully
Many employment decisions are made without a lot of planning. “We have a need – let’s get someone in here quickly to manage the workload!” But bad hiring decisions can be costly, about $16,000 on average. Instead, best practice is to write a job description, list the skills needed, determine the best recruiting sources, write appropriate interview questions, ask each candidate the same set of questions, and develop a system for making your hiring decision.
5. Not providing training
Companies have a lot of expense but training is one expense that pays huge dividends. New employees can greatly benefit from an onboarding process that helps them understand their job, goals, company culture, and where to find needed resources. Onboarding training helps your new employees contribute more quickly.
Also, many new managers are thrown into the job of supervising without a lot of support. We provide practical management training that increases the confidence and competence of your leaders, reduces turnover (the number one reason employees leave companies is a bad relationship with their supervisor), and reduces the risk of lawsuits by disgruntled employees who feel as if they have been treated unfairly.
In addition, research shows that employees appreciate companies that provide them with training to learn new skills.
Simply said, training pays off.
6. Not documenting performance decisions
The last HR mistake that we find that companies make can be the most time consuming and costly. An employee who does not know why he or she was fired may sue you and you may need documentation to prove that you did not make a discriminatory decision. In addition, an employee who did not get the promotion he or she had hoped to get may sue you and, again, you may need to show that you made the decision based on documented performance.
These six HR mistakes just begin to scratch the surface of issues to avoid. The Lindenberger Group can help. Contact us at 609.730.1049.