Human resources are an essential element of every business, both big and small. However, small businesses do not usually have designated HR departments like larger companies. So, many or all HR issues in small businesses need to be dealt with by the business owner. Here are some of the most common HR issues you could face, and the best ways to handle them.
Discrimination and Harassment
Just because you think your small business is just and fair, it does not mean discrimination and harassment cases will not happen. Indeed, according to the latest figures from the US Equal Opportunity Employment Commission, in 2016, the organization received over 91,000 charges of discrimination in the workplace. So, it could happen to your company. The best way of dealing with such cases is to hire a lawyer. One who has had to prepare for LSAT and passed rigorous exams to become a high-flying professional is ideal. But small businesses cannot always afford top lawyers. An alternative solution is to arrange an impartial investigation by a neutral party to handle any cases of discrimination and harassment.
Inadequate Hiring Process
Various HR issues can stem from an inadequate hiring process. For example, if you post a poor job description, you will attract job applicants who do not have the right qualifications and experience. Hurried interviews can also lead to the wrong person being hired for the position. If you want to let someone go after discovering he or she does not have the necessary skills and experience, but you do not have just cause to do so, your mistake of not being clear in the job-posting could cost you dearly. To avoid such issues, make sure your job descriptions are concise but as detailed as possible. You will then attract the right quality talent for the role.
Small businesses are often not as formal as large companies when it comes to properly-documenting things like company policies and employee benefits. If you do not document those things correctly, you will face constant questions from confused staff members. And you could end up facing legal problems if employees claim they were not made aware of essential company policies. There is an easy way to solve that problem before it happens. Ensure you document everything in a concise, easy-to-read employee handbook.
Misclassifying employees is one of the worst mistakes a small business can make. It can lead to thousands of dollars in penalties to the Internal Revenue Service. In your small business, make sure you know the difference between an employee and a contractor. Many employees working for small firms begin with 1099 status when they should have W-2 status. It can take the IRS several years to catch such mistakes, but the price will be high when it does. Make sure your employees are correctly classified from the offset to avoid this issue.
Promoting the Wrong People
In a small business, you probably know your employees quite well. Therefore, it can be tempting to offer the reward of promotion to someone you like and who does a great job in his or her current position. However, that does not mean the individual will do well in the promoted role. If you promote someone beyond his or her capabilities, you will soon notice an abundance of problems. That could lead to the employee leaving, even though he or she was excellent at the previous lower-level job. To avoid promoting the wrong people as a reward, instead, conduct a thorough assessment of your employees’ skills and attributes to find out who is truly management material.