Worst Small Business HR Issues So far in this series on HR for small businesses, we’ve talked about all the important parts of managing employees and human resources, from hiring and keeping the best people to building a company culture that welcomes everyone.
The goal has been to break down the topic of human resources for small businesses into easy-to-follow steps. But we all know that real life isn’t always as easy or clear as theory. Things go wrong. Sometimes, bad things happen.
So, in this lesson Worst Small Business HR Issues, we’ll look at some of the worst HR problems that a small business might face. Even though it’s a bit early, think of it as the Halloween episode of the series. But don’t worry, it’s not all scary. We’ll also talk about how you can fix these problems and give you links to other resources that can help you give Nightmare on Small Business Street a happy ending.
Here are the 20 Worst Small Business HR Issues;
1. Harassment and unfair treatment
Let’s just jump right into the deep end. One of your employees says that their manager has been sexually harassing them. Or, you might be accused of being unfair because of your race, gender, disability, or something else.
If you think this won’t happen to you, you should think again. In 2016, 91,503 complaints of discrimination at work were sent to the U.S. Equal Opportunity Employment Commission. A few years ago, the ride-sharing company Uber looked into 215 harassment claims, which led to the firing of 20 employees Worst Small Business HR Issues.
Two things about Uber are interesting and can teach us something. The first is that Susan Fowler, the first Uber employee to talk about her complaints in public, said in a blog post that HR ignored or downplayed her complaints over and over again. The second is that the company did the right thing, albeit late, when it hired outside lawyers to do a thorough, unbiased investigation. But by then, there was already a lot of damage.
2. Don’ts in an Interview
There is an art to giving a good job interview, and you want to make sure you use the time well to find out if the candidate is right for the job.
But even more importantly, some questions are against the law and can lead to lawsuits if they are asked. This is because of the Equal Opportunity Act, which limits what information employers can ask job applicants to give out to protect them from discrimination. See the following tutorial to find out what these questions are and how to ask better ones instead Worst Small Business HR Issues:
3. Inadequate Documentation
Small businesses often do things in a less formal way than bigger ones, which can be a good thing sometimes. But there are also bad things about it.
If you don’t properly document things like company policies and employee benefits, confused employees will ask you questions all the time. You may also run into legal trouble in the future if employees say they weren’t told about important company policies Worst Small Business HR Issues.
4. Giving the wrong people more power
Even if someone is good at their current job, that doesn’t mean they’ll be good at management. We’ve all met people who were given jobs that were too big for them. The result is the loss of a worker who was good at a lower-level job and the creation of a manager who isn’t very good at what they do.
5. Problems with Employees
Not every disagreement between employees has to do with harassment claims. People don’t always get along, or they have very different ideas about how to do something.
But these problems can also be serious, and not just for the employees who are involved. If you don’t act quickly to solve the problem, it can get worse and spread to other coworkers, making everyone’s workplace toxic Worst Small Business HR Issues.
In a big company, the HR department will handle this kind of conflict, but in a small business, it’s usually up to the owner to handle it. Mediation is a process with steps that you can follow to reach a solution that everyone is happy with. See the last part of our employee communication guide for more information.
6. Hiring Mistakes
In theory, hiring a new employee should be a well-thought-out process that starts with carefully defining the skills needed for the job, moves through stages like researching pay, advertising, and interviewing, and ends with the perfect fit being hired for Worst Small Business HR Issues.
The truth is often different, though. Firms often want to fill a position as quickly as possible, so they hire someone who has the right qualifications on paper but doesn’t fit the company’s culture.
7. Resistance to diversity
The famous “Google memo” is a well-known example of a common problem: people who don’t see the value of diversity efforts or don’t like how they’re being carried out.
How you handle the situation will depend on a lot of things, like the nature of the criticism and the people who are involved. But the key is to talk to everyone involved clearly and make it clear that you encourage debate about the best way to achieve diversity, but that the debate must be respectful of other groups and not reinforce false stereotypes Worst Small Business HR Issues.
So, instead of using promotion as a reward, give your employees a serious test of their skills to see if they are ready to be managers or not. This article from the Harvard Business Review has more information about the skills to look for.
8. Not going through the review process
In a small business, you probably talk to your employees often and give them feedback, so it might not seem necessary to sit down with them and go through a formal review process. After all, they should already know what you think of their work, right?
Wrong. It’s great to give feedback on the spot, but it’s also important to set aside time regularly to talk about and evaluate an employee’s work in a more structured way Worst Small Business HR Issues.
9. Going against the law
You might not have a legal team, but you still need to know about employment laws and follow them.
These vary from country to country and region to region, so we can’t go into detail here. In general, you should know about workplace safety laws, workers’ rights to things like parental leave and union representation, and laws about equal opportunity for Worst Small Business HR Issues.
10. Letting down new hires
Even if you hire the right people, they won’t be able to reach their full potential if you don’t have a good plan for how to get them up to speed. Even worse, they might just give up. One study found that 40% of people who get bad training on the job quit within the first year for Worst Small Business HR Issues.
11. Bad Ways of Talking
In this area, small businesses have the upper hand. Imagine how hard it is for big companies with thousands of employees in different offices all over the world to make sure everyone is on the same page. Compared to that, things are easy for small businesses.
But communication can still be hard, especially as your business grows and you hire more people. As the company grows, the informal ways that worked when it was just you and two other people might not work anymore in Worst Small Business HR Issues.
Bad communication can hurt a business. In a survey done by the training company Fierce Inc., 86% of respondents said that failures at work were caused by people not working together or not communicating well.
12. Firing without following the rules
In the world of reality TV, it might be okay to just point at someone and say, “You’re fired.” But in real life, that kind of thinking can get you into a lot of trouble.
In many countries, employment laws protect workers from being fired unfairly, and if they feel they were treated unfairly, they can sue you. So, if someone isn’t doing their job well, it’s important to follow a clear and fair process in Worst Small Business HR Issues.
That means giving the employee several warnings over time, giving them a chance to get better, and keeping careful records of the whole process. See the last part of our last tutorial in this series for more information.
13. Social Media Disasters
You have a small business, and you trust your employees not to do stupid things online. You don’t need a policy on how to use social media, right?
Problems with social media are surprisingly common. One study found that more than 70% of employers have punished employees for using social media at work. Social media was used by employees to do things like Worst Small Business HR Issues:
give out private information, misrepresent what the business thinks, and bad-mouth the business or other co-workers.
So, it makes sense to have a clear policy so that people know what they can do and what they can’t.
14. Keeping records in a mess
As an employer, you have to keep certain records about your workers, such as contracts, pay information, reviews of their performance, and so on. You also need to make sure you fill out all the right tax forms, deduct the right amounts, and run payroll correctly for Worst Small Business HR Issues.
15. Not enough training
Even if you don’t have much money, you can still train people well. You can give your employees all the help they need to get better at their jobs by being creative and using free or low-cost resources like Worst Small Business HR Issues.
16. Jobs Without Clear Descriptions
We talked about this a little bit in “Hiring Mistakes,” but it’s a different problem. Unclear job descriptions can affect how well your employees do their jobs even after they have been hired.
Startups and small businesses are often more flexible than larger businesses because everyone pitches in to do a wide range of tasks. This can be good, but it can also cause confusion and make things less effective. If people don’t know what their jobs are, they will gravitate toward the more interesting and fun tasks and forget the boring but important ones. It’s also hard to tell how well someone did if it wasn’t clear what they were supposed to do for Worst Small Business HR Issues.
17. Losing the best people you know
The last thing on the list is something that no small business owner wants to happen, but most will at some point: a key employee wants to leave.
People change jobs a lot these days, so the situation sometimes can’t be helped. But there are things you can do to keep your best employees and keep them from leaving. Many of the things we’ve talked about in this series, like giving good training, better communication, and pay and benefits that are on par with the market, will help. Also, use performance reviews with your employees to make sure you’re giving them enough motivation and new challenges to keep them happy Worst Small Business HR Issues.
18. Not enough safety measures
As an employer, your main job is to make sure people have a safe place to work. It’s a big deal that in the U.S. in 2020, 4,764 workers died from injuries they got at work Worst Small Business HR Issues.
Even if your business is in an office and doesn’t seem very dangerous, you still need to evaluate the risks and set up controls to limit the dangers your employees face. In the first part of this guide to HR needs for small businesses, you can learn more about how to do this.
19. Uncompetitive Pay
When was the last time you looked at how other people are paid?
Don’t worry if they say “Never” or “What’s that?” It can be hard to know how much to pay a new employee and how much to raise their pay each year.
And there are also benefits to think about. If your pay and benefits packages aren’t good enough, it will be hard to find and keep the best employees. On the other hand, if you offer great pay and benefits, it can help you stand out from the crowd’s Worst Small Business HR Issues.
20. Payroll and Benefits Status
It’s great to offer useful benefits to your employees, but it also makes your business more complicated. There are a lot of things that can go wrong with employee benefits, like not keeping track of vacation days or not putting in the right amount to a retirement account.
Then there’s payroll, which is easier than you might think to mess up. If you pay people late, pay the wrong amount, or don’t take out the right amount of taxes and national insurance contributions, your employees will be very upset, and you may even get in trouble with the law for Worst Small Business HR Issues.