When everything appears to be running smoothly, and employees seem content with their company, it is normal for the human resource department to be neglected. Because of this indifference to HR departments, human resource blunders sometimes lead to significant troubles. Oftentimes, these issues even become unsolvable.
If the employees are a company’s bloodline, HR professionals are its central nervous system. The HR department supplies employees in every department with the knowledge and tools they need to work effectively and eventually influence the company’s operations.
Any problems caused in the HR department can severely influence company operations due to the integral role they play. Usually, everything looks perfect from the top and the bottom of the organization’s hierarchy. But when you dive deeper, you may identify many small issues that can even shut a company down. In this article, we are going to discuss the most common HR mistakes and how to avoid them.
8 Common HR Mistakes to Avoid
1. Outdated or Non-existent Employee Handbook
While the Department of Labor does not mandate companies to create an employee handbook, certain laws, such as the Employee Family Medical Leave Act, Workplace Harassment Policy, and the Fair Labor Standards Act, compel companies to display an overview of the most important aspects of regulatory compliance.
Your company is at risk if it does not have an employee handbook or uses an outdated version. They act as a source of information to communicate the rules, practices, and principles of a company. Maintaining your HR procedures without a handbook is much more challenging.
The employee handbook must contain regulations and guidelines for employee-facing policies like workplace safety, disciplinary measures, personal device usage, social media usage, alcohol and drug abuse, and leave and remote work.
Employee handbooks can assist small businesses in preventing miscommunication and reducing their chances of facing disputes and litigation linked to employment. These complaints usually result from the mistreatment of workers or a lack of understanding of procedures and guidelines.
The Department of Labor supplies a Basic Compliance Assistance Toolkit to make sure you have the updated policies in your employee handbook.
2. Poor Recruitment and Onboarding Processes
Companies invest a considerable amount of resources and capital in recruiting talent. A study by the Society for Human Resource Management (SHRM) says that the average time it takes to fill a vacancy is 42 days. After compensation, recruiting is the most significant HR-related expense in a business. Companies frequently lack effective onboarding protocols for bringing recruits up to speed after they are employed.
Onboarding is used to familiarize new employees with a company’s culture and practices, in addition to ensuring they have the essential resources (laptops, workstations, etc.) and availability to self-service tools that allow them to participate in training programs and other benefits. Reputed organizations integrate onboarding into strategic initiatives which can improve employee onboarding and company culture. Mentorship, determining future training requirements, having access to training materials, and scheduling meetings with other team members and stakeholders are examples of such initiatives.
3. Bad Hires
A survey conducted by CareerBuilder revealed that the average cost of a bad hire is approximately $15,000, while the average value of losing a good recruit is close to $30,000. Almost three out of every four recruiters admitted to hiring the wrong person for a job.
Bad hires result in lower productivity, waste recruitment funds, lengthen the time it takes to hire and train new talent, and potentially affect the standard of work. Make sure that the candidate is interviewed and evaluated by members of their respective departments, and always verify references to minimize the likelihood of this happening. Rely on your HR department for guidance as you consider the candidates’ overall attitude and potential for learning.
4. Unprotected Data
Data theft and cyberattacks pose significant threats to businesses, particularly small and mid-sized companies. The risk goes beyond direct expenses to concerns about company image, much like the inability to foster a culture that promotes inclusiveness and diversity. One of the typical reasons for a harmful breach is employee accounts and credentials being stolen or hacked, wherein cybercriminals use credentials and emails that have already been publicly disclosed. To lessen the likelihood of a cyberattack, educate staff members on the best practices for digital security and tighten the parameters for password requirements and how often they must be updated.
5. Lack of Employee Performance Documentation
Performance documentation not only assists employees in improving their daily tasks, but it is significant in the event of a lawsuit. The documentation should outline the expectations of the company, how the employee fell short of them, any prior counseling or disciplinary action, future expectations, and the repercussions for not achieving targets. If an employee files a lawsuit for discrimination based on an assessment that lacks documentation, there could be legal ramifications. Highlight the positive and negative aspects of performance reviews in a portal or physical document. With performance documentation, promotion or termination is supported by proof.
6. Incomplete Employee Data
It may seem time-consuming to maintain employee information and human resource management. However, keeping accurate employment records might help you comply with regulatory bodies.
Confidential material like an employee’s social security number, bank account detail, health records, personal contact detail, offer letter, training records, payroll documents, and performance evaluations are included in employee data.
Misusing this data is one of the worst HR practices. If handled incorrectly and distributed to unauthorized individuals, it could endanger an employee and land your business in trouble. You must have processes in place for collecting, storing, and safeguarding confidential employee records.
If an employee accuses the organization of retaliation, the company will need evidence that the action was a rational business decision to invalidate the allegation. Therefore, ensure that you can easily locate and maintain track of papers like annual performance goals, documented reports of disciplinary action, and breaches of corporate policy.
7. Lack of Compliance Knowledge and Potential Litigation
Litigation is strongly influenced by the necessity to keep track of continually changing laws and regulations, especially at the state level. The HR department needs to be aware of the policies that apply to their business and alert employees and management of any significant changes. If an issue is raised, launch an inquiry right away, and investigate all parties involved.
Businesses can be fined thousands of dollars for compliance violations. Hire a legal expert or work with an HR partner who has a specialized team familiar with updated statutes and regulations at the federal and state levels to prevent such a scenario.
8. Failing to Incorporate an Adequate Payroll System
Payroll processing can be one of the most challenging and complex processes in HR operations. Payroll management blunders can result in unfair remuneration, inaccurate salary calculations, and ultimately dissatisfied employees. Companies frequently make mistakes like incorrect data entry, misclassification of employees, delayed payroll, etc.
To prevent these payroll and documentation errors, use an automated payroll system. This platform will compile all important information in one place and determine the exact amount that should be paid to each employee depending on their hourly rate and salary structure. Additionally, it maintains accurate records of employee paychecks and payment dates, helping to prevent errors.
Build a Successful and Efficient Business
The HR blunders that new businesses frequently make can easily be prevented if you follow these simple suggestions. They’ll help you ensure that your business doesn’t suffer the expensive mistakes of recruiting unskilled workers or not giving adequate training to employees.
If you are a small or medium-sized company that cannot afford an internal human resources department, partner with third-party HR experts and employment attorneys. This can help you concentrate on expanding your company rather than worrying about how payroll taxes, insurance, and employee records should be processed. It is essential that you pay attention to human resource management for your company’s operations to operate effectively and efficiently.
BIO
Anna McKenzie is a former business consultant and advisor with a master’s degree in business administration from UCLA. With 12+ years of experience in consulting businesses of different sizes, verticals and locals for better financial, operational, human resources and marketing practices, Anna now works with fundkite.com
to share her knowledge and educate through the company blog. Chess and photography are her favorite pastimes when she gets that opportunity.
