Stop Making These 4 HR Mistakes: Why You Should Hire a Human Resource Consultant
When it comes to running a business, it’s a good idea to expect the unexpected. Missed shipments, sick employees, and being thrown for a loop by demanding clients are all par for the course.
But what about the cost of mistakes made by HR?
There are few things that will take the wind out of your sails faster than an employee lawsuit. According to research by Hiscox, the average cost of an employee lawsuit is $160,000, and it can take an average of 318 days to resolve.
So, while every problem might not be avoidable, savvy business owners will always look for ways to mitigate the risk of major issues, especially when they can significantly impact their bottom line.
To help with this, we’ve put together a list of four of the most common HR mistakes.
1. Not Having an Employee Handbook
An employee handbook is critical when it comes to protecting your company from employee litigation. Not only is it the best way to effectively communicate what’s expected of employees and leadership, but it’s also what you’ll fall back on in the event of an employee lawsuit.
Not having an employee handbook can lead to:
- Unnecessary Legal Risk: Lacking a clearly communicated set of policies and procedures leaves the company open to legal disputes and non-compliance issues.
- Loss of Productivity: If policy expectations aren’t made clear in writing, employees can lose time while seeking clarification. What’s worse, they may handle issues without proper guidance, leading to non-compliance issues.
- Inconsistent Policy Enforcement: Different managers may take different approaches to problems unless they are explicitly told otherwise. This can lead to inconsistent treatment, which employees may interpret as unfair.
- Confusing Onboarding: New employees rely on employee handbooks to grasp company policies, procedures, and expectations. Without this resource, onboarding is more challenging and confusing.
An employee handbook is more than a list of rules. It’s an important legal document that will help your company avoid legal liabilities, improve productivity, and contribute to a cohesive company culture.
2. Assuming HR Problems Will Resolve Themselves without Human Resource Consulting
Running a smooth ship is often about squashing small problems before they become bigger ones. There is no area where this is more important than HR-related issues, where minor disputes can turn into significant legal challenges if left unchecked.
Unresolved Problems Can Increase Employee Turnover
Unresolved problems can spill over from one employee to the next, leading to negative work environments and increased turnover. So even if you think the problem will go away when the parties involved are no longer with your company, don’t be surprised to see the issue reappear down the line with different faces.
According to Gallup, the cost of replacing a single employee can be anywhere from one-half to double that employee’s annual salary. An organization with around 100 employees can face up to $2.6 million in turnover costs each year.
Simmering Disputes Will Impact Productivity
Unresolved conflicts can weigh on the minds of employees while they’re at work. This is distracting and stressful and can lead to decreased productivity and efficiency.
Your Own Reputation Can Be Damaged
As a business owner, your employees look to you for leadership and guidance. If your workplace is rife with minor conflicts that go unacknowledged, you could be seen as an ineffective leader. This will make it more difficult to attract good talent or even business partners and investors.
3. Failure to Have a Succession Plan
Uncertainty about the future can have significant consequences for an organization. Without a proper succession plan, a business can suffer from disruptions, loss of talent, and decreased morale.
Lack of Continuity Can Cause Disruptions
When key leaders depart suddenly or without a clear successor, vacuums can form in leadership roles. This can paralyze an organization by seizing up decision-making, strategy execution, and even daily operations.
Institutional Knowledge Can Fall by the Wayside
Experienced leaders possess valuable knowledge about the inner workings of your company. Without a succession plan, you risk losing this knowledge, permanently impacting your company’s ability to adapt.
Resorting to External Hires Can Increase Recruitment Costs
If you lack internal candidates who are ready to step into leadership roles, you’ll have to resort to outside hires. These candidates often lead to increased recruitment expenses due to time lost.
4. Not Creating Time to Stay Up-to-Date with HR Compliance Regulations
HR regulations exist to protect employees and foster harmonious, ethical work environments. It’s important to stay abreast of any changes in this area, but this can be easier said than done when regulations are constantly shifting.
Failing to stay on top of HR compliance regulations can result in:
- Legal Consequences: Failure to comply with HR regulations can result in substantial fines imposed by government agencies.
- Workplace Disruptions: Investigations, audits, or legal proceedings resulting from non-compliance can divert time and resources from business operations.
- Decreased Employee Morale: If employees are worried their rights are not being upheld at work, they can experience stress and anxiety, leading to decreased morale and productivity.
- Reputational Damage: The reputation of being an unfriendly or non-compliant workplace can spread quickly. This can affect your ability to attract talent, form business partnerships, and even impact customers’ opinions of you.
Mitigate HR Mistakes with BBSI Human Resource Consulting
These four HR mistakes can all prove extremely costly for a small or medium-sized business.
Yet, being aware of these potential pitfalls is only half the battle. If you’re a business owner who lacks HR expertise, implementing solutions to these problems may be a daunting task.
A BBSI, we know the best defense against mistakes like these, is a great offense.
BBSI is a PEO that has the experience, resources, and knowledge to meet your human resource consulting needs.
Whether you need help crafting an employee handbook, resolving disputes, planning for the future, or just need help ensuring you’re always up to date with HR regulations, BBSI is ready to offer support.
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