HR Lessons Need Not Be Learned the Hard Way

One of the most frustrating things I encountered back when I practiced law was just how often I would see small business owners in my office, in trouble, because they had bad information.

Example: One fellow decided that, in order to be friendly, he would ask job candidates about their holiday plans — “So, what are your family Christmas traditions?” or “Hanukkah eh? That’s interesting. How do you celebrate that exactly?”

Now, I knew the guy. He didn’t have a malicious bone in his body. But the Christian woman who didn’t get the job didn’t know that; she was convinced that she wasn’t hired due to religious discrimination. Even though she was incorrect, she seemingly had “proof.” It cost my client a pretty penny to learn the hard way that you cannot ask religious questions when hiring.

That experience is but one reason why the most recent ComplyRight National Small Business Compliance Pulse Survey is so interesting. The survey surveyed owners, CEOs, and others charged with handling HR responsibilities at 300 small businesses (five to 100 employees) across the U.S. One of the first things that jumped out at me was that less than half of the small business owners surveyed said that they were “very confident” that they were aware of all federal, state, and local labor laws that could affect their businesses.

That’s really dangerous because the fact is, what you don’t know can hurt you.

And, what’s worse is that when they do want to learn more about employment law, small business owners often turn to sources that are not always the best:

• First, the survey found that entrepreneurs look to written notifications from federal and state agencies. The problem with this is that agencies rarely provide such notifications or updates.
• Next, small business owners look to their own lawyers, accountants, or other business advisors. The problem here is that many of these advisors have limited knowledge of labor laws due to the complexity and rapidly changing nature of the beast.
• Finally, respondents reported that they rely on the knowledge of friends and colleagues. No commentary is even necessary here.

So, the situation is this: Even though we’re in an era of increasing employment law intricacies, a time of ever-changing state, local, and federal regulations, many small business owners have no set processes in place for staying up to date with those changes, let alone learning what it is they need to know.

But even so, at least they have state-of-the-art processes for managing their HR issues, right?

If only.

Get this: Almost half of the small business employers surveyed (46%) rely on “pen, paper, and sticky notes” for their HR process. Indeed, only 17% have invested in contemporary HR systems — technology that can manage HR-related information in one place with one program. The problem with an analog process in a digital world is that not only can this lead to significant legal and financial problems, but it also translates into stress and reduced productivity among the employees who are managing compliance.

So, the question is this: What should small business owners and office and HR managers do to manage all of these regulations such that they are never forced to sit across from their own lawyer, lamenting their lack of HR savviness?

I would suggest that the best practice is actually fairly simple:

1. Take time to investigate, and invest in, up-to-date technology and processes such as web-based HR solutions
2. Choose compliance-minded vendors and partners who fully understand the importance of labor law regulations
3. Protect your company by regularly updating employee policies to cover and address new developments that have a direct impact on the business and employees

A well-structured HR system, supported by comprehensive HR services, can help you attract and retain top talent, improve employee performance, and create a positive company culture.

The bottom line is that the smart small business owner will invest in modern HR solutions, knowing that, in reality, it doesn’t cost; it pays.

The Importance of HR in Small Businesses

Human resources (HR) plays a vital role in the success of small businesses. As a small business owner, managing HR tasks can be overwhelming, especially when you’re already handling multiple responsibilities. However, neglecting HR can lead to decreased employee morale, increased turnover rates, and even legal issues. A well-structured HR system can help you attract and retain top talent, improve employee performance, and create a positive company culture. By investing in HR, small businesses can help ensure that their employees are motivated, productive, and aligned with the company’s goals.

Building a Strong HR Foundation

Building a strong HR foundation is crucial for small businesses. This involves creating a comprehensive employee handbook that outlines company policies, procedures, and expectations. It’s essential to include information on employee benefits, compensation, and performance management. A well-written employee handbook can help prevent misunderstandings, reduce conflicts, and help ensure compliance with federal employment laws. By clearly communicating what’s expected of employees and what they can expect in return, small businesses can foster a transparent and fair working environment.

HR Compliance and Risk Management

HR compliance and risk management are critical aspects of HR management. Small business owners must ensure they comply with federal employment laws, such as the Fair Labor Standards Act (FLSA) and the Family and Medical Leave Act (FMLA). Failure to comply can result in costly fines and penalties. HR professionals can help small businesses navigate complex employment laws and regulations, reducing the risk of non-compliance. By staying informed and proactive, small businesses can protect themselves from legal issues and create a stable and compliant workplace.

Performance Management and Employee Growth

Performance management and employee growth are essential for small businesses. Regular performance evaluations can help identify areas for improvement, provide feedback, and set goals for employee development. HR professionals can help small businesses create a performance management system that rewards employees for their achievements and provides opportunities for growth and development. By focusing on continuous improvement and recognizing employee contributions, small businesses can boost morale and drive long-term success.

Company Culture and Employee Well-being

Company culture and employee well-being are critical components of HR management. A positive company culture can improve employee morale, increase productivity, and reduce turnover rates. HR professionals can help small businesses create a more inclusive workplace culture that promotes employee well-being, diversity, and inclusion. This can include offering competitive benefits packages, providing employee training and development opportunities, and promoting work-life balance. By prioritizing employee health and well-being, small businesses can create a supportive and thriving work environment.

Steve Strauss is a senior small business columnist at USA Today and author of 15 books, including The Small Business Bible.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.