5 Human Resource Errors That Most Businesses Overlook
Human resources is one area of business that sometimes ends up pushed to the background as companies focus on more immediate concerns. However, human resource errors can end up costing quite a bit in the long run, so it’s important that companies pinpoint potentially costly mistakes before they become more serious issues. To keep everything running smoothly now and in the future, make sure you’re not making any of these often-overlooked errors in human resources.
1. A Careless Hiring Process
One major problem that many companies have is prioritizing speed over quality when it comes to the hiring process. It’s tempting to accelerate hiring when you need employees right away, but it’s always better to consider the long-term implications of a move instead of going for a short-term solution.
When you hire someone who isn’t a fit for your company or the position that you’re filling, you’re going to use significant resources training them. Then, you’ll be stuck with an employee who doesn’t meet your productivity needs. If you choose to let them go, then you’re back where you started. One CareerBuilder survey estimated that just one bad hire can cost your company over $50,000, all the more incentive to get it right the first time.
So, how do you ensure that you hire the right person? Start with a detailed job description that clearly outlines the position’s responsibilities, minimum qualifications and perks, along with information about your company. Set up a consistent process for interviewing applications so you can easily compare them all. Involve as many team members in the interview process as possible to get people’s opinions on which applicants are a good fit.
2. Lack of Training
Companies often don’t make training their employees enough of a priority. Instead of providing frequent and thorough training opportunities, they get employees up to speed as quickly as possible and then let them learn on the fly.
Providing adequate training is a way of investing in your employees and subsequently investing in your company. Employees who are more skilled and knowledgeable will be able to help your company much more over the long haul. The training process should begin with a detailed onboarding process. Not only does this allow new hires to learn your company’s rules and procedures, but working with a trainer can help them feel more welcome and integrate themselves into the group more.
Make sure the training opportunities don’t end after onboarding, either. Continue to provide training at every stage so that employees can grow and feel like they’re an important part of the team.
3. Employee Handbook Issues
A company that doesn’t have an up-to-date handbook is leaving itself open to all kinds of issues. A good employee handbook will set expectations regarding employee conduct on the job. If your company doesn’t have an employee handbook or it has one that’s outdated, then you have no record of providing this conduct information to every employee.
Without an employee handbook, employees may not be aware of how they should handle certain situations. If an employee violates company policy and you terminate them, an employee handbook could make all the difference in a wrongful-termination lawsuit.
Ideally, you should review your employee handbook annually and make any necessary changes or updates. Any time you hire an employee, provide them with a copy of the employee handbook and require that they sign a form acknowledging that they’ve received the handbook and will follow what it says.
4. Not Recording Performance Issues
Just like the previous item regarding employee handbooks, recording performance issues is crucial to cover yourself in the event of a wrongful-termination lawsuit. It may seem unnecessary to record every time an employee showed up late or violated other company procedures, but it’s possible that you’ll need that documentation later to show that you were justified in a termination.
Another reason why you should always record performance issues is to handle those problems immediately. When there is a problem, you should bring that to the employee’s attention and also make a record of this. In doing so, you’re giving the employee the opportunity to fix their performance. You’re also creating a paper trail of evidence demonstrating what policy the employee violated and your response. Obviously the best outcome is that the employee improves their performance, but in case that doesn’t happen, you need to be prepared for the worst.
5. Misclassifying Employees
One very common issue for all kinds of companies is misclassifying employees as independent contractors. Whether companies simply made a mistake or they’re trying to avoid paying taxes, misclassification can lead to serious penalties from the IRS. For a recent example, look no further than the ridesharing companies Uber and Lyft, which had to agree to settlements for tens of millions of dollars after incorrectly classifying drivers as independent contractors.
How can you tell the difference between an employee and an independent contractor? There are a few requirements for a person to be considered an independent contractor. They, not the company, must have control over how they do their job. There can’t be a contract describing the business relationship between the company and the worker, and the company obviously can’t give the worker employee benefits. The company can’t control the financial side of the worker’s job, such as how they’re paid and expense reimbursement.
Generally speaking, companies will typically hire employees for permanent positions, while they may hire independent contractors for short-term temporary assignments. Always err on the side of caution, because you must pay taxes for any employees.
Much of what your company’s human resources department does comes down to putting your employees in the best position to succeed and covering your company in regards to employment law and taxes. Watch out for those common mistakes and your company could save quite a bit of money.