Nearly 56 percent of new hires leave their jobs in their first year, according to Equifax. What does this say about the state of human resources these days? Well, if you’re a small business, you may think this doesn’t apply to you. In fact, hiring an HR team may be the last thing on your mind. But with statistics like this, it may be time to reevaluate your strategy (or lack thereof).
If high turnovers aren’t frightening enough, payroll and benefits (both responsibilities of a human resources department) are some of the largest costs for a company. So how can you remedy these obstacles? Building out a professional human resources team can help (1) increase employee satisfaction, and in turn, reduce turnover rates, and (2) optimize spending on payroll and benefits, because of their expertise in human capital development.
If you haven’t built out your HR team yet, don’t panic. It’s not too late. But before you begin, let’s take a look at five mistakes you want to avoid:
If hiring a HR team is on the bottom rung of your priority list, it may be an easy decision to start outsourcing, especially if resources are scarce to begin with. Though there are pros and cons to outsourcing your HR department, there is one glaringly important aspect that slips through the cracks: accountability. How can you make sure that your third-party vendor is giving your employees enough attention and care? In fact, what happens when there is internal conflict? These are just a few great questions to ask before you even think about outsourcing such an important department.
2. Acting Like a Cop
There are a lot of rules that come along with running a human resources department. So you might hire someone to “patrol” your workplace—making sure everyone is complying with the law. But is that the only aspect HR is responsible for? No, not at all! It’s only a snippet of a bigger picture. So if you have an workplace cop, stealthily disguised as an HR representative, you may want to rethink your decision. To be effective, the HR department is supposed to be an ally to the employees, among many other things.
3. Having Dual Roles
You may have taken the initiative to hire an HR associate. But since you don’t have any more wiggle room in your payroll budget, you may have them play a dual position—handling both administrative human resources duties and recruiting responsibilities. I mean, they’re both in the same wheelhouse, so you think, “Why not?” With too many important tasks on their plate, it may not be the smartest idea, especially if your small business has hit 50 employees already. By this time, priorities tend to shift because requirements under the Family and Medical Leave Act kick in and other human resource responsibilities tend to get more complex. With a full staff of 50 employees, you’ll need senior-level human resources employees who are confident handling more than just administrative duties.
4. Hiring Friends and Family
Sometimes it’s tempting to hire friends and family members. It may be a good idea if they have a strong professional background in human resources, but if they have zero to little experience, it’s probably best to hire a professional. You may think you’re saving money by hiring people you know but an experienced professional will actually help you save money in the long run. Since they know how to navigate the complex world of human resources, they can help your company avoid any ramifications associated with not staying compliant with the law. Messing up could mean owing anything from back payroll taxes to interest to various other penalties. Additionally, there will be a large amount of paperwork (and headache) to deal with.
5. Doing It Yourself
Hiring yourself may sound like the next best option. I mean, you’re probably doing sales, marketing, and project management duties so what’s one more department going to do, right? Wrong. First, do you have any experience in human resources? If the answer is no, then it’s probably best to step away from this responsibility. Your real next best option is to hire a true professional who knows how to reconcile personnel conflict, handle administrative duties, and understand the ins and outs of the legal implications of running a human resources department. If your team needs help explaining topics like open enrollment, workplace safety, and 401ks to your employees, consider using a service like GuideSpark to lessen the burden on your HR team and make those dry topics more fun.
In the end, having a human resources department is crucial. It may take some time to find the right person to fill this important role but until then, you can stay compliant with the law by:
With Rocket Lawyer, you can create HR documents, like an Employee Handbook, and get guidance from legal experts. During the document-making process, you have the option to simply ask a lawyer and an expert will answer within one business day. There’s no guesswork involved. With huge monetary penalties (and the possibility of tainting your company’s professional reputation), there’s no excuse not to take this initiative. You can get your human resources department up and running with the guidance of our legal experts.
And now with an effective human resources system in place, your new hires can be a part of that 44 percent that actually stay at their jobs after their first year. Now wouldn’t that be nice?
- Social Media Policies Top HR Challenges for 2013: Infographic(rocketlawyer.com)
- Common Labor Laws You May Be Breaking Without Realizing It(rocketlawyer.com)
- Working on a Holiday: Pay Guidelines to Keep Things Legal(rocketlawyer.com)