Small business owners wear many hats, from accounting to legal and sometimes even janitor. But human resources is probably one of the most important, and more complicated, roles you fill. Your employees are one of your greatest assets and it’s important that you protect and manage that asset correctly.

That’s why it is vital that you make sure your small business avoids these common, costly mistakes.

#1. Not Getting the Right Person for the Job

Small business owners often fill open positions with any person they can. They usually don’t have the budget to do background checks or pull references to verify what a candidate says on his or her application, or they hire someone they know rather than searching for the most qualified candidate in order to fill an opening quickly. Regardless, hiring the wrong person can be a costly mistake that can cause problems. Eventually that individual will need to be replaced, adding more time and expense to the process.

#2. Using Vague Job Descriptions

Without detailed job descriptions, you may end up with employees who don’t understand what their job is or have their own ideas about what they should be doing. And without a job description to refer back to, it can be difficult to resolve the situation. At a minimum, a job description should include the expectations of the role, any physical requirements and any skills or training required. While creating a job description for each position can be time-consuming, not only will it help you with choosing employees who meet your needs, having their job documented will help prevent future disputes over roles and responsibilities.

#3. Not Understanding Basic Employment Laws

Do you understand all of the employment laws that apply to your business? Many small business owners think that they are exempt from employment laws, however, that is often not the case. Never assume that employment laws don’t apply to your company. Ignoring them can cost your small business more than you realize. A few of these laws include:

#4. Inadequate Training

Small businesses typically run lean so when there is an unfilled position, it can be a strain on everyone. So, when you fill an open position, the priority is often just to keep them up and functional as quickly as possible. But taking time to train your employees is a valuable investment in the future of your company. By providing your new hires with the tools they need to be successful and current employees with opportunities to grow, you create an engaged workforce that is capable of doing more for your business.

#5. Not Documenting Performance Issues

Messy terminations can lead to unwanted lawsuits; that’s why it’s important to deal with performance issues right away. Having a performance review process with a correction plan helps you and your employees understand how they are performing their job duties and, if they aren’t meeting expectations, what is the process to correct the issue. Unfortunately sometimes terminations are unavoidable, but going about them the right way can avoid any unwanted issues. The key is to thoroughly document any employee performance problems. It may seem time-consuming, but it can serve as valuable evidence should a termination be necessary.

Most of the problems described above can be solved by simply paying attention, taking the time to document things correctly and checking with your local government or the IRS to ensure you are meeting requirements. You don’t need a dedicated HR department – or even an HR professional – to solve these problems for your small business. Taking a few minutes now to document things correctly can save your company time and money in the long run.


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