If you’re a sole proprietor then you’re probably used to working on your own. But if you’re someone who’s looking to expand your small business by working with a team of employees, then you’re going to have to make some major changes. Most small business owners struggle with HR issues that can negatively impact their business. Here are some of the most common HR issues that you can avoid.
Inadequate Hiring Process
One of the many HR issues that sole proprietors and small business owners face is an inadequate hiring process. Most of these mistakes are made during the hiring process which can be detrimental to your business’s success. Most of the common problems include poorly-written job descriptions that attract the wrong applicants.
This leads to a hurried interview process that results in hiring the wrong employees. According to a 2013 study, one bad employee can cost a business $50,000. To avoid an inadequate hiring process, make sure your job descriptions are clear and concise. Your interviews should be handled in a way that attracts the right candidates.
Finding the Right Employees
Internal referrals are your best source at finding the right employees. Ask any of your current employees if you know of anyone who would be a great fit for your company. You could even offer financial or reward incentives for recruiting employees who bring you the best employees. If internal referrals don’t work for your business, consider joining a professional organization.
Most of these organizations have a job listing service that you can use. You may have to spend some time and money to find the right job candidates. During the interview process, check out the candidate’s past performance. Ask them questions relevant to the position and conduct a background check and verify the candidate’s references.
Losing Your Best Performers
Many small business owners have concerns about finding productive and valuable employees. Conduct a complete audit of your entire workplace and grade yourself on the following factors in relation to your top performers. You may need to adjust your organization’s benefit offerings, job requirements, management style, or pay structure based on the results of your audit.
While some surveys have produced different results, the top five factors that impact employee satisfaction include:
- The organization’s benefit offerings.
- The employee’s opportunity for advancement.
- The employee’s relationship with their manager.
- The employee’s salary.
- The employee’s opportunity to use their abilities and skills.
You should also clarify whether the people that will be working for you are employees or independent contractor. They would receive an independent contractor pay stub if they set their own hours, are responsible for their own taxes and supply their own equipment and supplies. Employees, on the other hand, work assigned hours, have taxes deducted from their paycheck and are given the equipment and tools necessary for the job. In this case, they would receive an employee pay stub.
Being Sued by an Employee
This is a fear in most small business owner’s minds. If you’re a sole proprietor who wants to expand your business, you want to make sure your workplace is free of harassment and discrimination. You should create or refine your workplace police that demonstrates each employee is treated fairly and with respect. Having documentation that supports that your company treats its employees with respect can protect you from a liability lawsuit.
Blurred Lines Between Friend & Manager
When you run a small business, it’s common to have your friends work with you. It’s also likely that some of your employees may become some of your closest friends. While having a relaxed and casual vibe in the workplace is fine, both employers and employers should keep their relationship productive and professional.
If your employees see as you a friend, it blurs the lines between what’s considered appropriate in the workplace. As part of the HR process, it’s important to keep some level of professionalism to give feedback and act as a leader. This allows your employees to see you as a boss first, and a friend second.
Department of Labor Audits
You should keep up with the federal and state labor laws. Conducting internal HR audits can help your organization prepare for any claims or workplace accidents. It’s important for you to hire a Human Resources manager who’s willing to help you with these labor compliance concerns. Your Human Resources manager and other professionals should be individuals who have acquired their human resources degree.
Following immigration laws, hourly laws, and wage laws are important, but an HR professional can give you the guidance you need to ensure your organization is compliant with these laws.
Maintaining Perspective
As a sole proprietor, you wear many hats and juggle many responsibilities. You will inevitably mess up from time to time. Make sure you learn how to forgive yourself and how to forge ahead with your chin held high. Be accountable for your mistakes, but don’t let them define you. As you work through them, your business and your life will continue to improve.
