HR Mistakes That Can Cost You
 
Human Resources performs many integral functions such as staffing, employee relations, performance man-agement, benefits, compensation, training and termination. Investment in HR, whether internal or external, can save thousands in the long run. Companies can easily make costly – yet preventable- mistakes. Here are a few instances when poor practices can cost your company:

1. Not up to snuff with employment laws. One legal misstep can cause and entire company to crumble. Did you know that businesses with just one or more employees are subject to more than 10 federal labor laws? A company that grows to 50 employees can be covered by 20 federal labor laws. Companies found to be non-compliant can face big fines and legal battles. Ignorance isn’t a defense.

2. Failure to understand employment-at-will. Employment-at-will doesn’t necessarily mean “fire-at-will.” What would you do if the EEOC called to advise you that an ex-employee filed a wrongful termination com-plaint? Without a documented termination process and recorded performance feedback your company could be in trouble.

3. Using probationary periods. Some companies use probationary employment periods for the initial days of employment, typically 90 days. By identifying these first 90 days, the company indicates the new hire is offi-cially off probation as of day 91. The company must now show cause to terminate employment.

4. Quick to hire. When companies are understaffed, supervisors may rush through the hiring process and end up regretting it. Poor hires take up time, create tension, cost money and can make bad impressions on cus-tomers. It is important employees fit into a workplace’s culture. It’s better to take time to hire the best candi-date than to terminate a poor fit and start all over again.

5. Initiation vs. on-boarding. New hires need time to acclimate to their position and work culture. According to a 2008 study by O.C. Tanner, 86 percent of new hires make their decision to leave or stay during the first six months of employment and only 15 percent of companies have a formal on-boarding process. On-boarding is more than a quick presentation and paperwork. Effective on-boarding increases employee engagement and propels employees to full productivity faster.

6. Incorrect wage and hour administration. The Fair Labor Standards Act (FLSA) administered by the Department of Labor (DOL) provides regulations on exempt and non-exempt classification, child labor, minimum wage, overtime pay and recordkeeping. These requirements can be complex and difficult to understand. The DOL estimates 70 percent of employers are not complaint.

7. Poor documentation and recordkeeping practices. Accurate documentation is critical. Both incomplete and over documentation can become liabilities in instances like discrimination suits or when protesting an unemployment claim.

8. Not addressing employee performance. Failure to address performance issues negatively affects morale of the top performers. This behavior creates the perception that sub-standard performance is acceptable and can drive away your “A” players. Poorly designed and administered programs damage the credibility of the organization and calls into question corporate values and integrity.

9. Overlooking the importance of training. Despite tight budgets, training is a practical way to teach employees how to work smarter with fewer resources. Training compliance varies, yet for companies that find themselves in hot water, training can be a substantial defense. According to the U.S. Sentencing Commission, “all organizations, whether privately or publicly held, must provide all employees and managers with effective and periodic ethics and legal compliance training.”

So what does all this mean? It means that it is important that your company invest in effective HR practices and functions and understand that this investment is as critical to the success of your company as having the right equipment, materials, products and processes.

Myco Portal offers companies solutions in compliance, recruiting, on-boarding, performance management, recordkeeping, employee management and much more. Call a Myco Portal representative today to learn more about our HR solutions and avoid any more costly mistakes.