5  Human  Resource  Management  Mistakes  Small  Businesses  Make    

   As  a  business  owner,  you’re  challenged  with  a  variety  of  tasks  every  day.  Small  business  owners  take  on  multiple  roles,  from  accounting  to  legal  to  human  resources.  Regardless  of  whether  you  handle  human  resources  yourself  or  delegate  it  to  someone  else,  your  company  is  bound  to  make  mistakes.  These  human  resource  management  mistakes  can  be  devastating  for  your  company  in  numerous  ways—from  litigation  to  employee  replacement  costs.  Therefore,  it  is  imperative  that  you  make  sure  your  company  avoids  these  common,  costly  mistakes.    #1.  Not  Hiring  the  Right  People  for  the  Job  Some  small  business  owners  hire  people  they  know  for  open  positions,  rather  than  interviewing  for  outside,  qualified  options.  Perhaps  you  don’t  have  the  finances,  so  you  don’t  do  background  checks  or  pull  references  to  verify  what  a  candidate  says  on  his  or  her  resume,  or  perhaps  you  just  hire  someone  because  you  feel  bad  for  them.  Regardless,  hiring  the  wrong  person  is  costly.  Not  only  are  they  not  qualified;  eventually  you  will  have  to  replace  them,  which  is  another  added  human  resource  management  expense.    

 #2.  Not  Creating  Clear  Job  Definitions  When  you  create  a  job  listing,  you  create  a  description  for  that  position.  But  most  small  business  owners  neglect  creating  an  accurate,  clear  job  description.  This  is  imperative  if  you  want  to  attract  the  right  people  for  the  job.  Your  description  should  include  the  skills,  training,  and  education,  an  ideal  candidate  should  possess,  and  you  should  only  accept  interviews  with  candidates  that  meet  those  basic  requirements.    #3.  Not  Addressing  or  Documenting  Performance  Issues  If  you  have  employees  with  performance  issues,  do  not  ignore  them  or  hope  that  they  go  away  on  their  own.  You  must  create  a  performance  review  with  a  correction  plan  for  the  employee  so  that  he  or  she  knows  how  to  improve.  Also,  make  sure  you  address  any  employee  issues  right  away  rather  than  wait.  By  having  all  of  the  issues  in  writing,  you  can  also  back  yourself  up  if  you  ever  need  to  terminate  that  employee  because  of  his  or  her  performance.    #4.  Not  Understanding  Basic  Employment  Laws  There  are  many  human  resource  management  laws  that  most  small  business  owners  ignore,  but  ignoring  these  laws  could  be  detrimental  to  your  company.  Familiarize  yourself  with:  

• Discrimination  • Overtime  and  minimum  wage  requirements  • Family  leave  • Age  and  gender  discrimination  • Disability  • Military  leave  • Gender-­‐pay  differences  • Safety  in  the  workplace  • Pregnancy  discrimination  • Immigration  

 Never  assume  that  employment  laws  don’t  apply  to  your  company.  Ignoring  them  can  cost  your  small  business  millions  of  dollars—or  at  least  more  than  you  realize.    #5.  Misclassifying  Your  Employees  Do  you  know  the  difference  between  a  contract  worker,  full-­‐time  employee,  and  part-­‐time  employee?  If  not,  you  need  to  familiarize  yourself  with  these  classifications.  The  U.S.  

Department  of  Labor  has  strict  guidelines,  as  does  the  Internal  Revenue  Service.  Do  not  try  to  classify  employees  as  “contract  workers”  to  save  on  benefits  either.  The  duties  and  pay  of  employees  classify  whether  or  not  they  are  permanent  employees.  In  general,  a  person  is  only  an  independent  contractor  if  you:  

• Don’t  have  control  of  their  job  and  the  work  they  do  • Don’t  have  any  written  contracts,  benefit  plans,  or  vacation  time  spelled  out  • Don’t  control  the  financial  aspects  of  the  worker’s  assignments  

 Learn  more  about  the  costly  mistakes  employers  make  by  getting  your  own  copy  of  Practical  Tools  to  Manage  Costly  Employee  Turnover.  This  e-­‐book  teaches  you  about  the  common  mistakes  and  provides  you  with  practical  tools  that  you  can  implement  right  away  to  fix  employee  turnover  and  save  your  company  thousands  in  human  resources  costs.  You  can  also  download  a  free  Hiring  Essentials  packet  to  make  sure  you  avoid  making  any  human  resource  management  mistakes  during  the  hiring  process.