13 Common HR Mistakes to Avoid for New Businesses

Common HR Mistakes to Avoid for New Businesses

ExecutiveChronicles.com | 13 Common HR Mistakes to Avoid for New Businesses | You’ve just started your own company, and you want to do everything right. But with all the common HR mistakes that new businesses make, it might feel like you’re running uphill.

It doesn’t have to be this way, though. If you avoid these common HR mistakes, then things will go a lot smoother in the long run. Here are ten common HR mistakes to avoid for new businesses:

  1. Lack of an Employee Handbook

One common mistake that many new businesses make is not to have an employee handbook at all. If you spend time and money documenting your policies, this mistake can be avoided.

Think of the employee handbook as your first line of defense for common HR mistakes. And that’s because it will help you communicate to everyone what is expected from them on the job.

Having an employee handbook may sound like a bit overkill. But when you sit down and research, this will sound like a mistake that can be easily avoided.

Lack of an employee handbook can lead to awkward interactions with employees. If you don’t create one now, you’ll probably regret it later when mistakes start happening.

  1. Failing to Note Performance Issues

Some new businesses make a mistake. They don’t note performance problems early enough.

A business owner of a new company needs to note any concerns while they’re still small in nature. If someone does poorly at work, you need to talk to them about it.

Otherwise, these problems can lead to other issues. For example, turnover rates may be higher, or company morale might not be good.

When the time comes for you to conduct the performance review, then you should talk about areas where your employee needs improvement. You shouldn’t do this behind closed doors either, as it will send a message to other team members that this is how you handle such situations.

Instead, make sure to address this with the employee in question. And also, keep other team members involved by letting them know that they can always speak up if any of their colleagues are struggling on the job.

All this should be happening during your regular HR meetings. This is where you ask questions about how people feel about certain aspects of their jobs or company life in general.

  1. Incomplete Employee Files

It’s also a common HR mistake to have incomplete files for your employees.

Having paper-based employee files is one thing. But having electronic files that can be accessed by managers quickly at any time is even better. Some companies make the mistake of poorly managing HR documents.

For example, it’s not uncommon for small businesses to keep outdated contact information.

Another common mistake is storing them in disorganized folders. This makes retrieval difficult, especially if multiple people need access to these records. The result is wasted time and frustration when you’re trying to find the correct records for an employee.

  1. Not Having Separate HR Records for Different Categories of Employees

At many smaller businesses, there are only one or two people who work in the HR department. They may have to handle tasks like administering benefits programs and onboarding paperwork. And that’s on top of other administrative tasks.

In some cases, these same folks will be doing payroll or handling employee termination issues.

When this happens, it leads to some challenges. For instance, you may not have access to all the information you need to conduct HR functions.

This is why it’s a good idea to have separate HR records for each category of employees. This allows different people to access and maintain the information separately.

Another benefit of this structure is when employees have access to their own files. They can update certain items like contact information themselves.

You won’t get stuck with tracking them down or following up when your records are inaccurate.  This makes the entire HR process run more smoothly.

  1. Hasty Hires

A common HR mistake with new businesses is making hasty hires due to a lack of funding or a rush to get someone in place for a particular role.

If your company has grown and you need more help, it’s tempting to hire the first candidate. This can happen without doing much research on their work background, goals, and other factors.

This can lead to some disgruntled employees later because they may not have all the necessary skills needed for such a position. It also leads to unhappy customers over time if that employee ends up being incompetent in their duties.

It’s better to invest the time upfront to find a good match for your company. It will save you lots of headaches later on.

  1. Failure to Update Company Policies Regularly

Company policies are a common HR mistake because it’s common for them not to be updated. This leads to what we call “policy drift.” It means that the company is no longer in compliance with its policies and procedures. 

New hires may not know about these rules, or they aren’t enforced properly. It also makes it difficult for employees to figure out what they can and can’t do at work.

  1. Lacking HR Software to Help

There are many ways to avoid all the headaches that come from managing an HR department in a small business.  You need to have good software and hardware to do your work. If you don’t, you might not find lose documentation or miss important deadlines.

An example of this would be scheduling onboarding paperwork for new employees, so they get them as soon as possible during your company’s first interaction with them. Or using the same system to complete background checks and then email the information directly out when it’s completed. That way, there’s no chance of losing those records or not finding them when you need them later on. 

Additionally, if you maintain separate records for different employee categories, you can use one system to save on your technology costs.  You also don’t have to worry about having the right equipment for each system because it’s all in one place, which saves time.

When building a business from scratch or adding new employees to your existing team, make sure that you’re using the top HR software for onboarding new employees. It will ensure everything runs smoothly and there are no unpleasant surprises along the way.

  1. Keeping Weak Employees OnBoard

Another common HR mistake that new businesses make is keeping weak employees on board for far too long. It’s important to hold everyone who is working for you accountable for their performance, even if it means letting them go from the team altogether.

You don’t have to necessarily do an official performance review to determine if an employee is struggling or not. Instead, you can just hold regular HR meetings with everyone and ask them how they’re feeling about their job.

Some red flags may show up during these discussions, like your staff complaining about the lack of teamwork or a toxic work environment. For new businesses, it’s important to keep everyone in the loop so that no one feels left out of the conversation.

If someone is experiencing problems on the job, there needs to be some type of feedback. After that, all parties will know what is expected from each other moving forward.

  1. A Lack of Communication From Management

It’s important to make sure that everyone who is part of your team feels like they’re a valued member. And one way you can do this is by communicating with them about what the company is up to and how that affects them daily.

Communication between management and employees should be ongoing during each month or quarter at a minimum. This helps keep things fresh in people’s minds too, which can help prevent employee turnover for various reasons.

If an employee leaves the company without warning, it’s probably because there was some type of breakdown in communication. And this can happen due to policies and procedures that need to be followed while doing their job.

Think about how easy it would have been for this employee to feel had management communicated with them more often. Doing this can help you avoid common HR mistakes from occurring in these situations.

  1. Too Many Rules and Regulations

The problem with having too many rules and regulations is that it creates an environment where employees are afraid to ask questions. Or worse, they may assume what their responsibilities are without any input or instructions from management.

That’s why sometimes it makes sense for companies to hold meetings every once in a while where new rules and procedures are discussed. It’s better than having your policies listed out in some document somewhere (your employee handbook). This way, there aren’t as many surprises for what the employee is required to do regularly.

When you think about having too many rules and regulations in place, this isn’t uncommon for new businesses. And it can lead to some awkward situations if employees aren’t asking the right questions. Or don’t feel comfortable with what their responsibilities are while working at your company.

  1. Not Establishing Any Type of Employee Benefits Package

This is another common HR mistake that new businesses often make. And it can lead to employees leaving the company by looking for something better down the road.

Employees will start looking elsewhere for employment opportunities when you don’t offer any type of employee benefits packages like health insurance or retirement plans.

You need to invest some time upfront into making sure that each of your employees gets some type of benefits package. This helps build loyalty between all parties involved.

  1. Failing to Communicate Your Policies for Hiring Employees

Another common HR mistake is failing to communicate your policies for hiring employees when they are new. This may sound straightforward, but there are ways that you could mess this up if you’re not careful about how you approach things. It isn’t just enough to send out an email that says everything’s in the employee handbook.

Instead, you should make time to sit down and have a one-on-one conversation with each new hire. Let them know what they can expect from you, what is expected of them, and how things work around your company.

It may seem unnecessary to do this when it comes to hiring employees for the first time. But in fact, it helps to avoid all kinds of common HR mistakes down the road if you take this step now as you build your team for your business.

  1. Having No Training Policy

Another common HR mistake is failing to have any formal policy for training new employees. You can avoid this by ensuring that you’ve established your policies for new employees as they are being hired.

These days, most employees will expect some form of onboarding or orientation when they start a new job with a company. But unless you establish exactly what it will look like, then there is the risk that someone will just fill one of their time slots on the schedule as an “orientation session” and leave it at that.

This is why it’s important to be proactive and forward-thinking around having a training policy, onboarding process, etc., and communicating this to all new hires.

Do not assume that everyone knows what your policy is. Instead, make it a priority to communicate this with each new hire from the start.

Avoid Common HR Mistakes

It can be easy to fall into these common HR mistakes when you’ve just started your own business. But if you are proactive about avoiding these mistakes and establishing best practices in your company from the start, you’re likely to succeed.

We hope this article has been insightful. To read more interesting content, keep reading our blog posts.