Owning a small business can be a major juggling act. Being a leader, chief financial officer, office manager and all the other roles that go into making a successful business can be hard. Keeping all the “balls in the air” can be a tough juggling act, which can cause mistakes – sometimes serious ones. Mistakes in the human resources area can be easy to make if you don’t understand and are compliant with the law.
Here are five of the most common HR management pitfalls small businesses face today and how to avoid making them.
- Outdated Employee Handbook – The employee handbook is your guidebook for all employees and company leaderships about work-related policies. These policies could include: discrimination policies, standards of conduct, compensation, benefits, work schedules, security, and vacation/sick policies. Each business is different so the policies laid out in the handbook should be updated regularly and be specific to your field of business. Not having company policies in writing and updating regularly is just asking for trouble.
- Staying knowledgeable of Changing HR Laws –
Understanding federal, state, and local labor laws are critical when running a successful small business. Compliance with these laws can be a big headache for small businesses. There are a multitude of regulations, and these laws continue to change rapidly. Have a dedicated employee or HR consultant who can stay on top of changing laws and compliance requirements.
- Handling Terminations Poorly – No business leader wants to deal with a termination but they happen all the time. Messy fires can lead to unwanted lawsuits. Both performance and policy violations require documentation and a paper trail. “Make sure that you document any disciplinary issues, safety inspections, performance discussions, and the like. These records can save you if done right — or kill you if done poorly or not at all.”(Source: Intuit Books) This is yet another reason why the well-written employee handbook is needed.
Research shows that feeling appreciated- which comes from recognition from others- is one of the top drivers of employee engagement and retention. Showing appreciation can come in many different forms depending upon your field of specialty. Pay raises, promotions and Employee Appreciation Days are far from the only ways to motivate and supply incentives to your team. More than half of America’s companies use incentive programs spending over $77 billion annually on them. Here are a few monetary and creative approaches.
- Be Flexible – With so many employees with families and responsibilities outside the office, a great reward is flexibility. Since not every employee fits into the 9-5 environment allowing for flexibility is a way to boost morale, as well as show your employees how much their hard work is appreciated. Flexibility may mean flex hours or possibly even remote work. This flexibility may mean that your employees can cut back on child care or even allow for more time with children in general. Flexibility costs nothing and can reap major rewards in the long run.
- On-Site Rewards – Making your office into a place team members want to be is an incentive that employees will really appreciate. Ideas for this could range from a coffee cart on Fridays or a membership to the gym next door. Some very creative companies have installed game rooms or nap pods where employees can relax during breaks. This may seem counter productive to getting the work done but research says that these additions and incentives increase productivity.
- Call Outs – Everyone likes to be recognized for hard work or a job well done. “Call out” to team members who have done a great job during staff meetings or on an employee bulletin board. Recognizing an employee who has done an outstanding job could be in the form of a thank you note, a gift card or some other reward. Some unique ideas for rewards include featuring the employee in the company newsletter, giving priority parking for a month, arrange for a lunch in their honor or plan an “appreciation day” for those who go above and beyond the call of duty.
Perks whether they are financial or creative in nature are worth the time and effort as they will boost morale and possibly productivity. Give creative incentives a try in your office.
Writing, maintaining and executing all of the parts of an employee handbook can be a daunting task for any employer. Most new companies hold off writing such a document until their business has grown to a point where it necessary to have a formal list of items to review with each new employee during the on-boarding process. While it may seem overwhelming at first to put into a single document the goals, rules and policies of your company it is a good idea to do so for many reasons. The benefits can be numerous including the following:
- Every employee receives the same information about the rules/policies of the workplace.
- Employees will know what you expect from them (and what they can expect from you).
- Valuable legal protection if an employee later challenges you in court over any human resource issue such as benefits, hiring/firing, workplace rules, discipline, safety and a host of other topics.
Top Benefits of Spelling it all out in an Employee Handbook:
- All employees know and have read the core mission of the company.
- All employees understand the expectations of their job whether it is in regard to workplace attire, hours of operation, expected behaviors, harassment, or even drug and alcohol use.
- All employees will have a written document explaining the benefits whether they are medical, dental, retirement or paid time off.
- All employees and managers will have a written document explaining the need to comply with state and federal laws.
- All employees will understand where to turn to if they need help.
- All rules and specific policies are clearly stated for all employees to read and follow.
- All managers and leadership position understand their role including the consistent and fair dealings with each employee.
- Serves as a reference guide for both the employee and the employer, thereby eliminating common misunderstandings and unreasonable employment expectations.
- Allows all employees regardless of level, to understand the compliance regulations of the company when it comes to technology use/misuse and communications outside and internally within the company.
- Explains all safety regulations and rules so that the work environment can remain a safe and secure place to work.
Building a successful business means more than just selling more products and services. It means having an impact on the lives of your customers and your employees. Not too many years ago employee benefits meant merely health insurance and retirement packages. Now the business landscape has changed. What other benefits can employers offer their workforce to make a company more competitive and attractive to the highest level employees?
- Dental Insurance – An insurance plan that not many companies offer is a dental plan. Dental insurance is a common benefit though not required by law. Employers have options of choosing Fully-Funded Employer Plans, Partially-Funded Employer Plans or Fully-Funded Employee Plans depending upon the level of funding you plan to give.
- Flexible Spending Accounts– Flexible spending accounts, or FSAs, are a means of helping benefits set aside money on a pre-tax basis in order to cover basic medical expenses. Pre-taxed dollars are taken directly from the employee’s paycheck and deposited into the account to be used for out-of-pocket medical expenses.
- Vacation Time – As an employee accrues seniority their paid vacation time can increase. This is a common practice usually starting at two weeks for new employees.
- Flextime– This attractive benefit is a great option for many parents who find it impossible to work a normal workday and care for children or an elderly parent. Under a flexible work arrangement, an employee can choose to work typical business hours so long as they complete assignments in a timely manner.
- Remote Working– Yet another option that may fall into a benefit category is remote working for employees that need to work at home for part, or all, of the day. Believe it or not, remote workers tend to be efficient and productive unlike the stereotypical “work at home” situations of the past.
- 401K Plans – Competitive base pay, health insurance and a 401(k) plan are usually the must have benefits necessary to attract and keep talent in your company.
- Long/Short Term Disability– This is an insurance policy that protects an employee from loss of income in the event that he or she is unable to work due to illness, injury, or accident for a long/short period of time.
- Vision Insurance– While not a common insurance benefit many companies are now offering a low cost option. Vision insurance pays for employees to have regular vision examinations and pays for a percentage of the cost of corrective equipment.