When it comes to running your business, one major component that you cannot forget about is human resources. Human resources is all about the people, and if you want your business to be successful, then you need to make this a focus. Many new and small businesses make the mistake of not knowing the right things to implement in terms of HR, and it can be a costly mistake.
Human resources, also known as HR, is the component of the business that focuses on the employees, their rights, their pay, and much more. If you want to show that you value your employees, human resources is the best way to do that. Depending on your size, you may even want to bring in someone who can handle this full-time for your company. There are many components to HR and you want to be sure you get these right. HR starts as soon as an employee walks through the door and lasts until even after they have left your company. Whether you have someone to focus on HR for your company already or not, these are the top ten biggest things you should concern yourself with.
One of the most valuable tools that you can have to support both the employees and your company is an employee handbook. Not only is it a good resource for your employees to have at their fingertips, but it can also be a costly mistake for you to not have one. In the employee handbook, you will need to put all of your company policies in writing. All of these policies need to be consistent for all employees, fair, and easy to understand. If you do not have something like this in place, you could easily find yourself in a conflict.
For example, if you refused to pay unused vacation time to an employee upon termination, but you do not have a policy that states otherwise, then they could potentially file a claim against your company with the Department of Labor’s Wage and Hour Division. Since you do not have this policy in writing, this would be a disagreement that the former employee could easily win.
If there is anything that you think you want to be a policy, it needs to be in this employee handbook. Not only should this be provided to employees on their first day, but it is also smart to get them to sign a document that states they have received the handbook and that they understand its entirety. It is better to be safe than sorry. If you ever forget a policy, be sure to refer back to your employee handbook before you do anything.
You may think that you have plenty of time to find the perfect employees once you have found some solid ground with the business, but you do not want to put off finding good talent. Small businesses have an advantage over larger companies during the interview process because you can move faster than they can. Whereas big businesses may interview candidates over a few days, you may be able to devote an entire afternoon to it and determine your hiring decision fairly quickly. You need to take advantage of this and refrain from dragging out the hiring process. Find ways to appeal to great talent that can take your company further, and move fast when you find them. You want these people on your team as soon as possible, so do not wait to find them until a later date. All of the best candidates will likely be reviewing many offers, so you want to move quickly to try to make them your employee before a larger company comes back with an offer you cannot beat. Make this a priority and you will reap the benefits of quality employees sooner rather than later.
If you want to keep employees for a long time, the first thing you need to focus on is their onboarding. This should happen as soon as they walk in the door on the first day. You can miss out on many opportunities by delaying this process as well as lost time. Make sure you implement a process that helps to prepare employees prior to their first day, such as taking care of all payroll paperwork and other housekeeping items. You can automate the paperwork process to ensure that paperwork is filled out correctly as well as ensure that you get everything back that you need. Doing this will allow them to come in on day one and begin training or working. Formulate an email if you cannot put a system into place. Ensure they have everything they need to complete the paperwork and request that it be back to you prior to their start date. The amount of time and money this will save you over the long run will amaze you. It will also let the new employee know that you are on top of their onboarding process because you get everything done efficiently while letting them get to work or get to training.
You have likely already heard about all of the benefits that surround getting rid of most or all of the paper in your business, but you may not know how that relates to HR yet. Many companies struggle to find the right balance between the two because it can be hard to completely get rid of paper in terms of HR; however, you can greatly reduce it. This will help to streamline your HR practices and keep your HR employees happy. Some of the things that you should consider implementing technology for include:
It can be costly to do all of this on your own, but there are many different technology-based solutions perfect for smaller businesses in terms of cost. Take some time to research them to find what will work best for you and make everyone around the office happier.
One of the biggest mistakes that companies can make when they are first starting out is hiring and firing employees because of a small mistake or a feeling they may get about them. Not only can this be a costly way to run your business, but you also open yourself up for potential conflicts. These can easily be decisions that you regret later. Employees who are fired without being given a valid reason can file a claim against your company for being fired without cause or they can file a claim of discrimination if they happen to be in a protected class. Instead of running this risk and losing money, time, and respect in the process, you should consider creating a job performance review process for each role.
Take the time to create a list of job expectations for each employee position. You can create this on your own or consult with a lawyer to assist in this process. Another option is to bring in a consultant to take care of it for you. Do not think of the cost associated with this. Instead, think of how much money and time it will save you from disagreements over the long term. For all new employees, you should schedule regular evaluations, such as at 30 days, 60 days, and 90 days, to evaluate how they are doing in the role. Supervisors should ask specific questions during these reviews and also measure their performance. If there are areas that need to be improved, then you should let them know.
During these evaluations, you need to document everything that is discussed as well as any potential repercussions discussed if there are issues. In case an employee or former employee does have a disagreement with you for anything related to losing their job or job performance, you want to be able to prove the following things:
When your employees are doing well or have gone above and beyond for your company, you need to take the time to show them how appreciative you are. This shows that you are paying attention to the work they are doing as well as giving them the motivation to continue to do more. Even if it is just verbal feedback, letting them know that you like the work they are doing can change the attitude of an employee and make them work even harder. You may even want to consider setting performance goals and rewarding your employees when those goals are met. You do not have to spend a lot of money to implement this, either. The rewards could be a staff pizza lunch or cake if that is all you can afford in the moment.
One of the biggest decisions you will make when bringing on employees is how you will pay them. Will they be actual employees or independent contractors? This is not something that you will need to determine on your own. A lot has to do with how they are treated. Even if you want to choose to pay them as independent contractors to avoid having to pay payroll taxes or cover them under Workers' Compensation, you could end up paying these fees and some additional fines and penalties if you misclassify your employees. The other component of paying attention to compensation is making sure your employees are compensated well according to the market. Take a look at what similar positions are being paid in the market around you and compensate accordingly if you want to keep your employees happy as well as ensure they stay with you for a while. You should take a look at this compensation at least every year to ensure you are in line with the minimum wage in your state.
For HR, there are many different laws and regulations to be aware of, but these can also change at any time. To ensure you are on top of them, you need to keep up with federal, state, and local laws as well as reporting requirements. This can be a lot for anyone to keep up with, so you may consider getting cloud-based human capital management technology to help you with the legal components of HR.
Even with all of the right preparation and things in place, there is always a chance that you could get into a conflict. You need to have a great attorney on your side to help you with anything that may pop up or to advise you on specific situations. Try to find one that focuses on employment law as well as someone who is at a firm that covers various aspects of the law so that you always have someone to call just in case.
As you can see, HR can be very complex and even if you have someone on staff who can handle the day-to-day aspects of it for your business, you may still want to get some outside help. Consider reaching out to payroll companies to help you streamline everything or even recruiting organizations to help you find top talent. Just know that you do not have to do everything on your own, so if there is an area where you are struggling or things that you simply cannot do in-house, consider finding someone who can help you through it all. Your focus should always be on your employees when it comes to HR, so let other vendors take care of the things that are not so fun but can help make everyone more happy when it comes to HR and their job as a whole.
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