As a small-business owner, you wear many hats and have a million things running through your head on a single day. It can be hard to know which areas of the business you need to invest money into and how to weigh up the pros and cons of additional business expenses.
Everyone makes mistakes, but HR mistakes can be extremely costly – financially, legally, and from a workplace culture perspective. Yes, putting HR in the ‘too hard basket’ can be the easier option, but you are better of ensuring all your policies and procedures are right from the get-go and you have access to the most up-to-date advice when you need it.
Here are three of the biggest HR mistakes I see small-business owners make.
Mistake 1: Waiting for a big employee claim before getting professional HR advice
The pandemic has heightened the importance of the human resources function. We’ve all seen just how much employment law has changed in the last eighteen months. With the pace of all the changes, it’s easy to misinterpret the Government changes or to misclassify an employee’s award. Remember how confusing the rules around standing down employees were? This means incorrect information is communicated to employees, which can cost your business hundreds and thousands.
Despite knowing how complex it is to navigate around workplace relations, many businesses are still making the mistake of waiting until a significant issue arises before getting professional advice. Businesses can prevent headaches, reputational damage, and employee claims by seeking proactive HR advice.
You might be thinking, “I can’t possibly afford a HR manager or department!” Did you know you can outsource all or parts of the HR function such as payroll, recruitment, employee benefits, training, and development? This will free up your time to build and grow your business.
Mistake 2: No employee handbook
An employee handbook can be a valuable resource that provides guidance and information related to the mission, values, policies, procedures and benefits. It’s a great tool to induct any new employees and act as a reference guide for existing employees.
Every employee handbook looks different depending on the business and industry. While there is no legal requirement from Fair Work, having an employee handbook is a lifesaver. The biggest one is that it will help minimise the risk of any employee claims and conflicts. The handbook also makes it easier to reinforce behavioural and performance standards and expectations in the workplace.
As your business grows, so is the need to update your handbook to reflect any changes. Create a digital employee handbook because it makes it easier to update.
Mistake 3: Not providing constructive feedback before it’s too late
Many businesses are fixated on their cashflow, making money or the distractions of everyday life; they forget to take the time to give on-the-spot feedback and lead their people. No matter where your employees are working – remote, on-site or hybrid – they need to be recognised for their work and provided with feedback so they can perform.
Constructive feedback is essential for an employees’ ongoing development. It can help to clarify expectations, build confidence, and increase productivity. However, many managers are hesitant and uncomfortable giving constructive feedback. They are worried it could turn negative or be seen as criticism by the employee.
Like anything, getting better at providing feedback takes practice. My advice is to always act right away once you have observed the behaviour or event. It makes it easier to talk about rather than months down the track. Use positive and encouraging language when explaining the situation. For example, you could use phrases like “Maybe you could try?” or “Have you considered?”
Remember, constructive feedback is one of the best component managers can provide to their employees when delivered properly. It helps build a strong culture of transparency and high performance.
As a small-business owner, you don’t know what you don’t know, and HR is a complex element to navigate and an area that is constantly changing. It pays to stay up to date with advice and will ensure your legal obligations are covered. Getting HR help doesn’t mean you need to hire a full-time HR, either. There are lots of options available for small business owners to get the right amount of support for their business. Outsourcing your HR function is simple, effective and will help you mitigate risk and lower costs with great results.
