For any entrepreneur that has employees or hopes to hire employees in the future, this article is a must-read for you! Human resources (HR) is a critical part of every successful business and a necessity to protect and organize company practices. People are in the core of every business in the world, and having the right tools to start managing your people operations is at the tip of your fingers. Here are the 10 things every entrepreneur should know about HR:
What is the ultimate goal you have for your company? I am sure this is a loaded question for every budding entrepreneur, however, it is essential that you be able to provide this answer succinctly. Not only do mission statements define what your company is to your customers, they also define values and goals for current and future employees to stand by.
Stress and confusion can be detrimental to productivity. Provide your employees with open, transparent lines of communication to show that you value their time and effort by giving them the information they need to produce quality work.
Involving your workforce in conversations about the company or by simply keeping staff informed of goals and changes can help keep everyone on board as your company develops. Of course, there is such a thing as too much information. Try not to overload your employees with detailed reports of any little thing going on. Information overload can create more confusion and stress.
Company culture can be unique and complex. Creating an employee handbook as a guide for your employees on company policies and procedures so that everyone can stay on the same page can save you loads of headaches.
What is the difference between employees and contractors? What benefits do nonexempt employees receive versus exempt employees? If you are not sure of the differences yet, it is time to learn. Benefits, tax laws and liabilities vary by type of employee so be aware of different worker classifications.
An employee works for an employer with a defined schedule and location to perform their work. An employee generally uses company equipment and is paid either by the hour or with a salary. Contractors, however, can perform work for more than a single company at a time. They are typically paid per job and have more flexibility in designing their schedules.
While it may be tempting, do not make the mistake of hiring the first candidate you like. Poor hiring decisions can be very expensive! According to the Department of Labor, the cost of a bad hire can add up to as much as 30% of that employee’s earnings in the first year.
Focus on creating a job description that clearly defines the expectations for the position. Afterwards, design an interview process to test each candidate for knowledge, skills and attitude that fit within the job role and company culture.
Set up your new hires to succeed starting on day one. Establish expectations and objectives from the get-go to decrease confusion and stress moving forward. Additionally, maintain an open line of communication and regularly check in with new hires for the first few months of employment while they adjust.
An environment can be made safer by establishing emergency exit routes and procedures and action plans for emergencies. Keep a first aid kit or other medical supplies available if necessary as well.
The atmosphere of a company can also be made safer by enforcing equal employment opportunities as well as sexual harrassment and discrimination policies.
A competitive pay structure can help retain staff. Analyze the market to determine pay and benefits for different job positions. Be aware that some jobs may require specific benefits by law such as worker’s compensation.
Pay structures also need to be kept track of reliability, payroll errors can be very expensive. Invest time into researching what payroll management system best fits the needs of your company.
How will excellent employee performance be rewarded? Create a system of performance reviews to track employee performance over time. This can be an excellent resource when looking into promotion decisions. Additionally, regular feedback can increase retention as your staff can feel more assured that they are performing well. Alternatively, if an employee is not performing well, documentation can aid in making further employment decisions.
Ultimately, the best action you can take to protect your business is to develop a strong HR foundation from the beginning. Set expectations early with a clear mission statement, open communication and an employee handbook. Learn about different worker classifications and what is applicable to your start up. Develop a hiring, recruiting and onboarding process to find and keep strong candidates. Additionally, keep up with the details and create a system to organize all important documents and safety regulations. Last, develop a competitive pay structure and performance management system to attract and retain workers.