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10 HR Issues That Leave Your Business Exposed

John Komadina

2 weeks ago

We all know the important role that our employees play in our businesses. It is often said that human resources are every company’s greatest asset. Unfortunately, many small businesses in Arizona struggle with HR problems during their formative years. This is mainly due to a lack of information and regulatory loopholes that expose businesses to internal and external HR risks. This article will highlight the top 10 HR issues that small and medium-sized enterprises must address to reduce employee dissatisfaction, resource wastage, and litigation risks.

Poor Communication and Organization Culture

What and how you communicate to your employees determines their perception of your company and their roles. According to Clutch, poor communication on roles and the overall company vision, mission, and goals cause non-fulfillment amongst employees. Communication also influences your organizational culture and how business is conducted in your company.

As a CEO, you must clearly communicate the company vision and goals and the employee expectations and roles in achieving these goals. Additionally, you must also relay to your employees the organization’s HR policies to ensure that everybody is aware of your company culture and accountable for their actions. Such communication must be done without discrimination or unfairness, perceived or otherwise, to avoid complaints to the Equal Employment Opportunity Commission (EEOC).

Lack of or Outdated HR Guidelines

Like any other aspect of a business, employment policies and regulations tend to change. What was acceptable yesterday might be deemed illegal today, depending on changes in laws and HR practices. Failing to update your HR policies accordingly can leave room for misinterpretation and complaints. You must comply with the latest federal, state, and local HR laws and policies and communicate every change to your employees through employee handbooks, memos, and emails.

Failure to Adhere to Existing HR Rules

Although, as CEO’s we tend to hold some HR regulations in higher regard than others, we risk compromising compliance when we fail to adhere to “less important” policies. Employees often follow their leaders. Thus, it is vital to set the right standards by diligently communicating and following all the HR policies to avoid non-compliance issues and other HR risks.

Inaccurate or Non-Existent Job Descriptions

A job description is supposed to guide your employees on the roles that they play in your company. Inaccurate or non-existent job descriptions lead to confusion and make it difficult for employees to perform and contribute meaningfully towards your organizational objectives. Without clear job descriptions, you will be unable to measure your employees’ performance objectively and hold them accountable to the expected goals.

Payroll Issues

Small, family-owned businesses are more prone to payroll issues because they often lack proper payroll systems and policies. This creates risks of late and inaccurate payments that can easily cause employee dissatisfaction and legal issues. You can avoid this by implementing an integrated HR and payroll software that provides all-in-one solutions for all your employees and departments.

Unfair Treatment

Complaints regarding unfairness in the workplace are quite common in smaller businesses and especially family-owned operations. Unfair actions towards employees can create serious HR issues and expose your business to complaints and litigation. These may include unjustified unequal pay, favoritism, unfair punishments, and other forms of maltreatment. These can be avoided through clear, well-communicated policies and justified actions.

Untrained Management

Even though many companies rightly promote high performers into managerial positions, they fail to train them and assume that they will learn management skills on the job. This can result in confusion, unclear boundaries, and poor decisions by novice managers. You can reduce such cases through individual needs assessment and training sessions to bridge gaps in skills and performance for different roles.

Documentation of Employee Performance

It is necessary to have updated records of all your employees’ actions, progress, and performance. These include performance reviews, disciplinary actions, promotion, and positive reinforcement. Such documentation can back up your decisions as an employer and validate any actions you take towards your employees. Paper trails often come in handy when handling disputes and conflicts.

Misclassifying Employees

Some small companies have suffered hefty fines and been forced to pay substantial backdated wages because of misclassifying employees under the Fair Labor Standards Act. While some are genuine mistakes, there are cases of rogue employers trying to evade taxes. You can avoid this HR issue by auditing current job positions and rectifying any classification errors by crafting accurate and justifiable job descriptions that reflect your employees’ actual duties.

Addressing Internal Complaints

Although complaints are inevitable in any work environment, you can avoid unnecessary escalation by conducting thorough investigations and using impartial third-party mediation. Every complaint and action taken must also be recorded for future reference.

These are just, but a few employment challenges that small business owners face in their daily operations. Subscribe to our weekly blog to stay informed on handling HR concerns and creating HR best practices and guidelines for your business in Arizona.

For all your HR and employment related issues, contact us today to schedule a consultation with a certified HR professional.

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