Economists say that developed countries are in the backs of small and medium businesses. This is true considering that in 2010 alone, there are 27.9 million small businesses in the US. This number accounts for over 54% of the total sales in the country. But the problem is that a lot of businesses close shop, even before they gain traction. There are a lot of factors affecting the lives of small businesses, but one of the main reasons would be HR mistakes. In paper, the HR department acts as a middleman between employees and the company. They serve as liaison for employee payroll, benefits, and employment details. Most small businesses don’t even have their own HR department because of their size. Usually, it’s just the owner who acts as the HR department head, and they don’t hire an HR partner.
Don’t Be Part of the Statistics – Fight Back!
This is why a lot small businesses close down without a fight. Some might have a great product or service but still go down because of employee-related issues. Here are some of the most common human resource management service mistakes small businesses make.
Poor Recruitment Practices
They say that a team is only as weak as its weakest member. This applies to small businesses where the whole employment floor is the team itself. A lot of businesses fail to see the importance of a good recruitment process and just hire anybody that goes through the door. Remember that getting the right people is a very important step in building your business.
Getting Confused with the Status of Your Employees
Bigger HR recruiting firms know when an employee should be put as a casual, part-time, fixed-time, or fixed project employee. Sometimes, business owners make the mistake of confusing the different status that they end up either causing legal trouble with the employee or problems with staffing. Identify what you need and hire an employee accordingly.
Poor Record Keeping
One of the benefits of having an HR management consulting firm is that you don’t have to bother with record keeping, which can be pretty taxing. Depending on your location, the local government can impose penalties if your business fails to keep employment records. One good example of an overlooked practice is the issuance of pay slips to employees. Also, make sure you have records of time and wage for the past 7 years to be sure.
Lack of Mediation Between Business and Employee
Alright, we get it. You are a small business, and you really can’t afford an HR partner to do stuff for you, but you should at least put someone as a middle ground between the business and the employees. Somebody that is neutral and can provide collaboration, consultation, and communication between parties. Doing this job as the owner might be hard because you may have certain biases that will affect outcomes.
Although it might be a bit hard to chew, a growing business might actually need to employ an HR personnel at one point. This is to ensure that your business’s path is smooth sailing.