To many entrepreneurs and small business owners, nothing can be more cringe worthy than Human Resources and the issues involved in managing the “people part” of the workplace.
Good HR means three things: a clear management structure, a way for people to talk about workplace issues and concerns, and pathways for people to evolve in their careers
Regardless of your beliefs about the value of HR, there are a few HR basics no business can afford to get wrong. In this two-part blog we recommend the top 10 strategies to help you get it right and free yourself up to innovate and be the entrepreneur you are.
1. Don’t Go It Alone!
Successful small business owners know the importance of forming strategic partnerships. Those that fail often try to do too much on their own. Partnering with payroll service providers, consultants, and technology vendors can help recruit, retain, manage, and grow a small or medium businesses’ workforce, while employees concentrate on driving the business and focus on their your customers, products, and services.
When people are involved, you will have to deal with difficult situations that are incredibly vague. Was it sexual harassment? Discrimination? Bullying? There’s a lot of pressure to decide an outcome when there’s a grey area, and it’s important to know when to make an assertive decision yourself, and when to ask the experts, like peoplescapehr consultants, for help. In these cases, it’s helpful to hone skills of negotiation and mediation and to learn how to manage conflict because not every case is easily resolved or accepted by all parties.
2. Start Off on the Right Foot
No one wants to think about a policy manual until someone wants to know – right now – what’s allowed and what isn’t. It’s common for employee manuals to be put on the back burner while business is steadily moving forward. That’s OK, until work comes to a screeching halt while you scramble for a solution to a new and frustrating people problem.
Having established policies written in a handbook, and reviewing it for legal compliance and sustainability annually, will eliminate confusion as to what you expect from your employees. As an owner of small company, you may wish to set policies yourself and take full responsibility for drafting enforcing, reviewing, and updating all information in the employee handbook.
While there are many resources on the Internet to help you, such as the Society for Human Resource Management’s website we do not recommend off-the-shelf policies and manuals. It is critical that your company’s policies be customized to reflect your industry and geographic location. Employment laws vary by state of operation, and certain industries — such as transportation and health care — have special considerations. But perhaps the most critical factor in policy development is your company’s culture.
To increase productivity, many entrepreneurs look to experts like peoplescapehr to quickly and economically create a customized, sustainable policy manual to help minimize your business’ risks. Click here for more information.
Finally, at least once a year, proactively review the manual to ensure it’s compliant with current law and current ways of doing things at your company.
It’s crucial to have a program in place to ramp up new employees. That way when someone starts, you know what their first week/month looks like and how they’ll be trained. Present the information about the company honestly to set everyone up for success. If your handbook says everyone gets an hour lunch, but you know the real practice is to take 45 minutes, tell new employees that.
3. Start Organized; Stay Organized
If you had to justify an employment action to the Equal Employment Opportunity Commission (EEOC), would your files back up your claims? If your files were audited by the Department of Labor (DOL)
would they pass inspection or would you draw fines? Are all employees’ medical records (as defined by the ADA and GINA – the Genetic Information Nondiscrimination Act) kept separate from other employee information?
Be sure your files and legal documents are in order. If you assign someone to go through and collect every agreement that the company has ever signed, and organize every employee file, you will save a lot of future headaches.
We know file creation, organization, and maintenance is a monstrous headache for business leaders. Not only is it boring, your attention is needed elsewhere and better served focused on what drives your business. This is another time to partner with consultants at peoplescapehr. Outsourcing administrative and operational tasks are a cost effective way to protect your business and ensure regulatory compliance.
4. Understand the Basic Labor Laws that Apply to your Business
Federal, state, and local government regulations, laws, and reporting requirements change constantly. Using human capital management technology can be expensive, but it can help small businesses keep up with the changing legal landscape.
Some small business employers classify employees as independent contractors to avoid having to cover them under Workers’ Compensation Insurance and pay payroll taxes. Some classify employees as “exempt” under the Fair Labor Standards Act (FLSA) to avoid paying overtime penalties. These are not cost effective solutions. If employees are misclassified, then small businesses could end up having to pay back payroll taxes and benefit costs on top of fines and penalties.
Other employers may fail to properly pay employees for travel time, rest breaks and other compensable time, believing they will only be penalized for one employee if a claim is filed. Violations of wage and hour laws can lead to costly fines and penalties that can apply to all present and past employees who may not have been compensated correctly under the law.
5. With Diversity Comes Success
Building a team of diverse perspectives is crucial. You want unity of vision, but diversity of backgrounds is good as narrow-minded culture is typically less effective. Myopic teams can’t discern pitfalls, and waste time solving problems that could have been avoided with broader perspective and different experiences.
Check back next week for the second part of You’ve Hired the Best. Now What? and reveal the next five strategies to help you get it right and free yourself up to innovate and be the entrepreneur you are.