small business, HR, compliance

Human resources are one of the most important assets in a small business. However, many small businesses do not have designated HR support – often leaving the HR responsibility on someone lacking the time or HR expertise.  This often leads to challenges in small businesses succeeding at core HR functions.  Here are 5 of the most common challenges. 

1. Finding the Right Talent – The process of recruiting the employees you need for your business isn’t easy.  From lacking job descriptions to a hurried interview process – mistakes can easily be made.  Creating a structured recruitment strategy and corresponding process that also adheres to applicable workplace regulations is key to not only finding the right employees for your business but will also help retain them. 

2. Misclassifying Employees – It is critical that business owners correctly determine whether the individuals providing services for their business are employees or independent contractors.   Not knowing the difference between the two can affect your business in a major way.   Penalties can be quite costly if your company becomes the target of an IRS audit, even if it’s just an honest mistake. If you are unsure about how to conduct the correct legal analysis to appropriately designate employees vs. contractors, seek guidance. 

3. Inadequate Hiring Process – When hiring employees it’s important to start off on the right foot.    After a candidate has accepted a job offer and the start date is set, there are various onboarding steps that should be taken. From ensuring you have the necessary new hire paperwork that an employee must complete upon starting their employment with your business (such as tax forms and an I-9) – to your responsibility to maintain their paperwork in a manner that ensures your business is compliant with current labor laws – It’s crucial to have an efficient hiring process and to stick with it.

4. Lack of Written Policies – Policies and procedures are not only necessary to help meet a company’s legal obligations to its employees, but it also serves as a guide for employees by laying out expectations both on work conduct and performance measures as per your specific company standard.   When all parties understand their roles and responsibilities, and consequences for not adhering to these standards are clearly spelled out, the employer-employee relationship has the greatest chance of succeeding. 

5. Failing to Address Employee Performance Issues – Dealing with employee performance issues is never an easy task – but it is an essential part of managing employees.  In a small business environment, individual contributions have even more of a correlative effect on a company’s success or failure.  By appropriately documenting performance problems, your business is both mitigating your company’s risk should a worker file a lawsuit, while also helping to ensure that your team is productive and performing up to established standards. 

As you can see, administering the many aspects of hiring and managing employees can be complex.  However, succeeding in each of these areas are pivotal to every business’ success.   If you don’t already have dedicated in-house HR support, The HR Hotline® is an experienced HR company that partners with your business to not only overcome these challenges, but assist you with all of your human resources needs so that you can focus on growing and managing your business.  Contact us to see how we can help – or 855-4HR-LINE.