By: Regina Dyerly
Sometimes in the “busyness of running your business”, it is easy to forget the importance of
having a strong HR infrastructure and complying with changing regulatory conditions.
Unfortunately, when mistakes are made in Human Resources, they can cost companies both
time and money. Here are 10 of the most common HR mistakes, not in any particular order!
1. Not Having an Up-to-Date and Compliant Handbook
In the increasing legislatively heavy time we find ourselves in, it is surprising how many companies draft or edit handbooks without ensuring all necessary updates and requirements are included. Every year there are required edits that are needed, and a qualified professional should be reviewing it for you. Some handbook items to consider:
Not distributing and obtaining signed handbook acknowledgments every time there is an update and not storing signed acknowledgments in employee files.
Not ensuring it is accessible to employees to access anytime.
Not communicating and discussing major policy changes to ensure understanding.
Not communicating how important it is for new hires to read through the handbook and that they are accountable for following the policies of the handbook.
2. Lack of Documentation on Terminations
In rare cases, an employee does something so egregious that they need to be terminated immediately, but in most situations, there are numerous opportunities to address and document undesirable or non-compliant behavior(s) and it is critical that you do. Employer lawsuits are on the rise, and documentation is evidence that you took the proper steps to resolve performance issues. Having a documented disciplinary action process where deficiencies and expectations are clearly defined and communicated takes the guesswork out. Also, it is important to clearly state in the documentation that additional violations will result in further disciplinary action up to and including termination. The EEOC had 67,448 charges filed in 2020 and many of those turned into lawsuits.
3. Inconsistent and Insufficient Employee Files and Records
Filing isn’t fun, but it is necessary, and it is important to have a defined recording and retention process. For each employee, keep a careful record of new hire documents, employee performance reviews, handbook acknowledgments, etc. Medical, and other types of records, such as background check reports, FMLA, Workers’ Comp, I-9 forms, should be stored in separate confidential files where access should be restricted to those with authority and a need to know. Ensuring files and records are secure is essential and leveraging secure electronic files is recommended as this provides a centralized location for all your records, which can be accessed anytime and anywhere. It can also help protect you in case of a disaster which could otherwise destroy paper records.
Keep in mind there are federal laws that require employers to create and retain various forms of employment records and proper maintenance of employment records is also critical to defending against employment-related litigation.
4. Lack of Supervisor/Manager Training
Supervisors and Managers speak as a representative of your company to employees and it’s important to make sure they are prepared for the position you have put them in. Make sure your managers are clear on the rules of HR and hiring and understand the core values and ethics of your company. Let’s face it, some people are born with personality traits that make them great supervisors, but the average person is not. The more time you spend with your managers giving them the proper training that they need to become thoughtful leaders, the more longevity and productivity you will see with their employees. It is worth the investment.
5. Poor Hiring Practices
It is estimated that the cost of losing and replacing an employee can cost one and a half to two times that employee’s annual salary. Even more damaging is that a bad hire can negatively impact your reputation, productivity, and culture, which can have long-term effects. When interviewing external candidates, look for candidates that will fit well within the organization’s culture and can grow and adapt as needed. Relying on a candidate’s performance during an interview is very tricky as some candidates are very good interviewers and pick up on cues you subconsciously are giving. Multiple data points should be used such as a strong behavioral assessment that tells you work-related behaviors, such as the Predictive Index. Electronic references that are easy to complete will be more telling than a phone reference conversation.
Some questions to ask yourself: Do you have a consistent and organized interview process? Do you have standard interview questions that are related to the essential functions of the job? Are your interviewers trained on proper interview etiquette and know what questions they can and cannot ask? These items “if not addressed” create liability for discrimination and personal bias and can lead to poor hiring decisions.
6. Misclassification of Employees
This is another area that can be costly and contacting an HR expert to help you navigate how employees should be properly classified is critical. Incorrectly classifying employees can cost you thousands of dollars in backpay and penalties. The two most common mistakes are misclassifying workers as Independent Contractors when they are treated and directed as employees and the exempt vs. non-exempt classification which dictates an employee’s eligibility for overtime pay and sometimes certain benefits. Improperly classifying an employee as exempt from overtime can trigger wage claims with the Department of Labor.
7. Incomplete or Lack of Job Descriptions
The time spent creating a complete job description can prevent a myriad of future issues. During the recruiting process, a detailed job description will keep you on track of exactly what you need in a potential candidate (but please be realistic!). Once they are an employee a job description is an important reference tool during performance reviews and any counseling, if required. The job description is also needed if an employee requests a modification to their job for medical reasons. Understanding exactly what is expected of the employee, including what job tasks are essential will simplify the review process when dealing with the Americans with Disabilities Act (ADA).
8. Lack of Knowledge of Applicable HR Laws and Regulations
No one expects you to know it all, but if you do not have someone focused on HR laws and regulations you are putting your business and yourself at a huge risk. If you can’t justify having an internal HR person, consider partnering with an HR Outsourcer to advise you and protect your business from risk and liability. Each industry and business are unique. You need to ensure that you have the right policies to protect and ensure compliance that is specific. This also includes payroll practices. While it may seem easy to run your own payroll through DIY services such as QuickBooks, there are a lot of moving parts of payroll and compliance that you may not know about. It is worth it to contract a professional payroll company or have a knowledgeable and licensed tax professional reviewing and advising on your payroll methods and current legislation. Additionally, there are tax credits and incentives that you may miss out on.
9. Not Prioritizing Annual Compliance Training
Compliance training is often viewed as boring, but it does add a lot of value to your company. By training employees to become more knowledgeable about the regulations that affect their specific job roles, it protects your organization from a variety of damaging consequences. Compliance and ethics training will help employees understand how to stay in compliance and follow established rules, and never assume that something is “common-sense”. This training will help employees identify and report any violations they see, and they can help spot potential compliance issues before a violation occurs.
10. Disorganized onboarding and orientation of new hires.
Companies spend a lot of time and money on recruiting talent, but then fail to invest the time necessary to get the employee set up correctly to be successful. A solid onboarding strategy does not have to be complicated to give a new employee a great experience. In fact, most successful companies start their onboarding before the employee’s first day of work. First, it is important to know the difference between onboarding and orientation. For new hires, Employee Orientation is a one-time event that welcomes new employees to your company. Employee Onboarding is a series of job-specific trainings, meetings, and events, which includes orientation, which helps new hires progress into successful employees. While some employers will nail their orientation, onboarding is disorganized, or nonexistent and new hires are thrown into the fire of their new positions without any real introduction to the company. This sets a bad tone for the rest of their employment.
The bottom line, HR is hard! The list above may seem daunting, but it takes a village. One person is typically not an expert in every area of Human Resources and needs additional resources and support. A strong HR partnership will understand your organization’s strategy and contribute to it. That starts with making sure there are not any risks to your business, which comes from solid policies, procedures, and communication that will guide your company and employees on a successful path.