As the proud owner of a small business, you’re probably familiar with juggling responsibilities. It comes with the territory. Managing multiple details is no simple task, and prioritizing your to-do list can be a recurring challenge.
One area of responsibility — human resources — often gets moved to the bottom of the list when it should be consistently at the top of daily obligations.
But haven’t we already established how crazy busy we are? Fair enough. But there’s good news: If you approach HR as a foundational necessity, and then use online resources to help you manage it, you’ll spend less time juggling and more time growing your business.
According to the 2017 National Small Business Compliance Pulse Survey by ComplyRight, 74% of small businesses across the United States with five to 100 employees feel that employment laws are becoming increasingly complex. Meanwhile, 70% of small businesses continue to rely on manual methods — pen and paper, sticky notes, spreadsheets, or comprehensive business software — to manage HR tasks.
Even though respondents admit that HR compliance is more complex, they continue using outdated tools, which increases compliance risk. And what about assigning the HR role to someone unqualified to handle HR duties? Giving an untrained employee those responsibilities increases the chance of a legal misstep, which could put an end to the business you worked so hard to build.
Being exposed to compliance risk isn’t for lack of caring — it’s often due to a lack of accessible resources: time, budget, knowledge, or otherwise. This doesn’t mean you need to add overhead or buy comprehensive HR software packages. You need quick and easy processes to help you do more with less when tackling essential HR responsibilities.
Recordkeeping is much more than a list of employee names, addresses, phone numbers and emails. Any record of an employee is a record worth keeping. And the more employee records you maintain, the easier it is to review payroll issues, prove compliance with federal and state laws or make a case for disciplinary action when warranted.
It’s best to have three files for each employee: personnel file (hiring documents, performance documents and separation records), payroll file (salary/wage documentation, W-4 and W-2 forms, time/attendance records, payroll deduction or direct deposit authorization) and medical file (notes excusing absenteeism/lateness, on-the-job accidents or injuries, workers’ compensation benefits, health/life insurance documents).
If you wait until the end of the week or month to record important HR information, you may find yourself working harder to fill in the blanks down the road vs. as it happens. In addition to dreading the pile of paperwork that awaits, you increase the chance of errors when you don’t address tasks daily.
According to the 2017 HRdirect survey, The Impact of Absenteeism on Small Businesses in the U.S., more than 14% of respondents surveyed use NO method to track employee attendance.
If you don’t have an attendance tracking system, you may be paying employees for time they didn’t actually work. You also send a message that you don’t take your attendance policy seriously. If an employee gets a “free” day off, they may abuse the system regularly — which could discourage your superstars if they must work harder or longer because the attendance policy is unenforced.
It’s also important to track requested time off if there is ever a dispute over time worked. If you have no record of how much time an employee has taken off, it’s your word against theirs, which is never a good situation, especially in the event a problem escalates.
Speaking of disputes, it’s important to document everything regarding insubordination. Wrongful termination is one of the more common legal actions against small business owners, and building an ironclad case requires accurate and consistent records.
Instead of having a detailed history at their fingertips at all times, many small business owners find themselves building a case after the fact, which is a recipe for disaster. Your mantra for discipline management is simple: document, document, document. Make it your goal to work with employees to improve their work ethic vs. creating a culture of punishment. Document areas of concern, address concerns immediately, have an improvement plan, and follow up to see if progress is being made.
What could possibly go wrong during the hiring process? Plenty, if you’re not aware of potential pitfalls. For starters, federal discrimination laws prohibit any type of employer preference or bias based on gender, race, color, religion, national origin, age or disability. If your employment ad isn’t worded appropriately, you could appear discriminatory and not even know it.
Before you sit down with candidates, make sure they fill out a job application. Why? Resumes aren’t ideal records for comparison, because they only tell the story the candidate wants you to hear. Job applications help you gather the same information from all candidates in a consistent manner, which protects you from claims of discrimination. Additionally, requirements for job applications vary from state to state and the laws are continually changing. To make sure you don’t cross into illegal territory, use a state-specific job application that’s regularly updated by labor law experts.
When it’s time to interview, make sure all questions relate directly to the responsibilities, duties and requirements of the position. Follow-up questions are fine, just don’t stray from the job description or subject one candidate to a line of questioning that is different from the others. As much as casual conversation feels appropriate when meeting someone for the first time, it’s best to avoid it. Polite and friendly chit-chat often leads to unintentional discrimination. Once you go off course, it’s easy to bring up inappropriate areas such as family life, ethnicity or religion.
HR management for small business owners is challenging if you’re stretched for time or not familiar with all the responsibilities. That’s okay. The availability of attorney-developed cloud-based solutions can streamline the process, putting more time in your day and keep you in compliance.
When you’re ready to take it to the next level, HRdirect Smart Apps are just what you need to handle HR like a pro. Simple, affordable, and built by labor law experts, each Smart App is designed to help you address a specific employee-management goal, such as employee recordkeeping, attendance tracking, hiring, and more. It’s the fastest, easiest way to manage HR tasks without compromising other business priorities.
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