Although human resources is often overlooked, managing employees is one of the most important and complicated areas for a small business owner. Staffing is even more burdensome for a micro business that employs a handful of people; and yet, every small business needs to engage in the same good practices of dedicated HR departments.
This article is a checklist of the things necessary for good HR management. Whether you are a small company about to hire your first employee or a small business who already has a handful of employees, this list is a good resource. Depending on your company and industry, many aspects of employment law are complex so an employment lawyer may be needed as well.
I am currently coaching a small business owner who is planning for their first hire in 2020. It will be the biggest line item in the budget. Is this true for your business? Are employee salaries and benefits your biggest line item? Your employees are one of your company’s greatest assets. For the health and well-being of everyone, it is worth your time and attention.
If you have hiring and staffing responsibilities in your small business, take a few minutes and review this helpful checklist. You just might find an area that you’ve overlooked or have been meaning to get to. Don’t delay. Make human resources a priority.
Have a process for new hires.
Many small business owners hire someone they know or who are referred, and do little in the way of interviewing and vetting the candidate. They ask a few questions, find the person likeable, tell them what the job entails and then hires them. For the protection of your company, your employees and for the potential hire, do more to make sure it is a right fit. Ask more than questions that come to mind; plan the interview and ask good questions that allow the candidate to bring forth their true self.
It is also a good practice to 1) interview all candidates the same day 2) ask all candidates the same questions in order to make easy comparisons and 3) review the material and make a decision that day on who stands out. If you are enamored with a candidate, make the offer as soon as possible and ask for a quick decision. The job market is getting tighter and good candidates are hard to find.
Exercise due diligence.
If you’ve come away from an interview really liking a candidate, you may think to forego checking references. Don’t. A reference’s simple and short answers may confirm what your instinct is telling you; there’s more to the story that isn’t up for discussion. Here are some suggested questions to ask when checking references.
Clearly define compensation.
One of my earliest situations as a manager involved a pay raise for my assistant. She was a quiet woman with a very strong and efficient skill set. She boldly came to me after a six month period and explained to me what value she brought to the company and how this in turn earned her a pay increase. To this day, she is the employee I have most admired. She was a role model in opening up a difficult conversation about compensation.
Most of us are uncomfortable talking about money. That is all the more reason to have clear compensation guidelines. Pay particular attention to those excluded from overtime or minimum wage laws. Make sure those you employ are classified correctly; if employees are misclassified e.g. as independent contractor, then a small business could end up having to pay back payroll taxes and benefit costs on top of fines and penalties.
A complete compensation package should outline benefits such as vacation, sick days, and medical.
Federal, state and local government regulations, laws and reporting requirements change constantly; make sure you are familiar with current laws such as the Family and Medical Leave Act.
Create a good onboarding process.
James Clear uses employee training as a good example of time assets, actions or choices you make today that will save you time in the future. Even though you may take a deep inhale and dread the number of hours it may take to train an assistant, the time is considered an asset investment because having a well-trained employee will save time in the future.
It may take quite a bit of time to train employees but if you begin to create an onboarding process even with your first hire, the process will evolve and get better over time. Your employee will feel more connected to the organization and will know what is expected. This leads to a higher success rate which is a win/win for everyone on your team. If your company has business cards for employees, it’s nice to present these on the first day of work; it goes far in making the new employee immediately feel part of the team.
Make Safety - both physical and emotional - a priority.
Lay out your policies on how you will keep employees feeling safe at work, both physically and emotionally. Here is checklist for both the employer and employee. Critical is outlining a clear path for employees to report threatening behavior.
Whether your company manufacturers products or is a retail establishment, take time to review the safety policies for threats with in your environment. Here is the link to information on OSHA Occupational Safety and Health. Some of this maybe industry specific.
Value and demonstrate everyone’s right to privacy.
Demonstrate the highest regard for everyone’s privacy: employees, volunteers and customers. Make sure there is private space for important meetings. Have all employee files, paper or electronic, secured.
This works another way as well. You may have NDA Non-Disclosure agreements with employees if your company’s work involves new technology, sensitive information etc.
Put together an Employee Handbook.
Just as with onboarding, investing in an employee handbook is critical. You can download a sample here. When there are issues or misunderstandings, this will be the first resource that can bring clarity to the situation. The handbook should include company policies, non-harassment and non-discrimination policies, attendance and leave policies, social media policy and performance and discipline policies.
Be committed to employee reviews.
Don’t wait for a formal review to correct and encourage your employees. Simple daily or weekly verbal cues will go far. Set expectations and a rewards program. Any outward incidences of work that calls into question company’s policies should be addressed and documented immediately.
Make standard periodic reviews a best practice for your company. If you have been coaching, correcting and educating your employees along the way, an employee review will be a written summary of what you and the employee already know.
Employment-related lawsuits can be costly. Having a list of job expectations for employees and putting a job performance evaluation plan in place are both important in case of legal issues. If you are having job performance issues with an employee, document the following: 1) details showing proper action was taken to address the issue 2) details outlining that the involved employee(s) was informed of the need to correct the behaviors, and 3) that the employee was warned and made aware of the potential for additional disciplinary action and potential termination.
Keep employee files up to date and secure.
As noted above, documentation is important. Here is a smart way to organize your employee files.
I-9 File: This form is used by the U.S. Government to identify and verify that your employees are eligible to work in the U.S. Keep all I-9 files together in one file.
Employee General File: This is for your own benefit. It contains any documentation associated with that employee that you’ve collected during their time with you. This includes resumes, reviews, disciplinary action, training verification, evaluations, W-4 forms, payroll details, and so on.
Employee Medical File: These files will contain notes from doctors, disability information, and any medical information that you have on an employee. Because you are dealing with medical information, you must protect and secure these separately and keep them in a locked and secure place.For help with forms, this website has a library of forms that use can use as templates and refine to your own HR needs.
Display Required Posters.
Depending on the laws of the country and/or state your business is in, you may be required to post information in an easily accessible place. These vary from place to place, so you will want to contact a local government agency to make sure you are compliant. There are also companies that provide packets of posters depending upon your location to help make this process easier.
If you’ve read through the article and made it this far without adding anything to your to do list, congratulations! Your human resource skills are up to speed and you have created a good foundation for success with staffing. Make sure to review all policies, forms and files on a periodic basis.
If you’ve read through the article and have added some things to your list, great! Hopefully, you have learned a few things and identified areas that need work or your attention.
My goal is to see your business succeed by helping you reach clarity in your business. If I don’t have the answers or expertise, I’ll help connect you with an expert in that field. If you are interested, click here to learn more about my business coaching services.