The Top 6 HR Blunders – and What Small Businesses Can Do to Avoid Themby
The mistakes of job seekers and employees get plenty of exposure. But the folks in human resources make their fair share, too, either in hiring or managing employees.
The following is a list of the top six HR blunders – and advice on how your small business can avoid them – provided by Roseland, New Jersey-based human capital management firm ADP and Paul McDonald, a senior executive director with staffing firm Robert Half in Westlake Village, California.
1. Failing to do proper screening. That means improperly vetting credit, driving, and criminal records – and even comparing what job candidates say about their work experience with their references’ comments. According to information provided by ADP, screening indicated an adverse record for 82 percent of candidates.
“Background checks can reveal issues about a candidate that might cause a business owner to remove them from employment consideration on account of potential risks to the business, such as a criminal conviction that could impact the candidate’s ability to perform his or her job duties,” Aldor Delp, vice president and general manager of the HR Solutions Group in the Small Business Services Division at ADP, said in an emailed statement.
McDonald offers one easy and basic tip: Do an online search of the candidate’s name. If the person has moved around a lot, search public records in each state, he says.
Public records, incidentally, can reveal more than you'd probably need to find as an HR professional, such as lawsuits, property transactions, divorces, corporation directors, licenses, and more.
2. Hiring too quickly. When a small business (less than 50 employees) can shell out $3,665 to recruit just one employee, that old saw “haste makes waste” becomes reality, according to ADP. So develop a hiring process and stick to it, the company advises.
McDonald says employers fail to work their network to find good candidates. That network includes social media, website ads, recruiters, and former employees who might want to come back.
“The hiring process needs to be thorough and diligent,” he says. “You can’t take shortcuts.”
At the same time, you’ve got to work fast enough to catch that great job seeker, he adds.
3. Failing to make hiring an ongoing process. “Hiring isn’t an event, it’s a process,” McDonald says. Maintain your networking and make sure employees know that you’re looking.
“As a small business, you may be one resignation away from a critical need in your [firm],” he says. “If you have to start the recruiting engine up from scratch, you lose valuable time, which is money.”
What’s more, small businesses should have a succession plan, McDonald advises. If an employee resigns, it’s important to know who will be moved up or moved over. And that becomes easier if employees are cross-trained.
4.Ignoring retention efforts. It’s a jungle out there, right? And in today’s improving economy, the jungle is offering some good hunting.
“Professionals have a lot of options, and we’re seeing individuals take new jobs at a rapid rate,” McDonald says.
That means HR managers need to focus on morale and company culture in their employee-retention efforts, he adds.
5.Firing too quickly. There’s that “haste makes waste” saying again. Businesses that fail to follow their termination plan may face lawsuits by former employees, ADP advises. Co-workers who have to take on their former colleague’s work won’t be happy, which affects morale. And businesses that don’t follow final pay requirements may incur wage and hour violations, ADP says.
6. Improper pay. Just because someone’s title is “manager” doesn’t make them exempt, ADP says. Exempt status must meet specific salary and duty tests, and that classification then determines eligibility for overtime pay and certain benefits, according to ADP. Be aware that the US Department of Labor has taken a keen interest in audits in this area.
McDonald offers another take on wages: Companies aren’t spending enough time on compensation reviews.
“The market has changed and a lot of budgets were approved last July,” he says. “And compensation being offered today is higher than some predictions.”
With that jungle hungry for good talent and with demand high, “wages are going up for certain skill sets in IT, accounting, and compliance areas,” he adds.
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.