As compared to big businesses that have well-established processes, small businesses do not. for example, in the field of Human Resources (HR), small businesses are likely to opt for a more informal approach.
This compromises the efficacy and efficiency of the system and results in the occurrence of several key problems.
According to experts at the Success Human Resource Centre, the best HR processes and strategies can become an invaluable asset for any organization.
It does not matter what kind of an organization you are, or how big you are, you need to start taking HR seriously.
In this article, we are going to look at the list of five common HR mistakes, small businesses make. Additionally, we will look at how poor HR practices cost small businesses.
List of 5 Most Common Human Resource Mistakes made by Small Businesses
1. Not Hiring in the Right Fashion-
For small businesses, hiring is a major cause for concern. They want people for a specific role, but cannot assess whether the person has that skill set or not. Hiring is done when there is a need, rather than in a planned way according to business forecasts. The process is fast, almost hastily done and this results in hiring many poor employees that do not have the skills.
2. Running a Business without an HR Team/Professional-
Even if small businesses cannot afford to spend resources on holistic HR teams and professionals, hiring a single individual should be done. This is because everything related to the employees needs to be done in a structure. It can help in getting the right candidates, building assessment systems, aiding in payroll management, and so on.
3. Compromising on the Training and Orientation of New Employees-
A hiring process in a small business that runs without an HR is putting an ad on a job portal, asking the professional to come down for an interview, hiring them, and asking them to join the office. This individual is thrown into the deep end of the pool almost immediately since small businesses do not have any proper training mechanism. This results in attrition and losses.
4. Skimming on Performance Assessments and Reviews-
Small businesses are notorious for having petty office politics and favoritism. Those that have the ear of the business owner are likely to get increments and favors. This creates a bad example and good employees who cannot do this often have no choice but to leave the organization. Proper assessments should be done for raising increments and promotions.
5. Improper Employee Documentation and Verification-
As there is often no one to verify the documents a new employee submits, this process becomes severely jeopardized. In the worst situation, it can lead to an employee stealing and causing losses for the business. When this happens, there is no legitimate paperwork to trace the employee or find out about who they were and where did they come from.
How Poor HR Practices results in losses for Small Businesses
In this section, we are going to shed some light on how small businesses end up at the receiving end because of poor HR practices-
- Not having a proper HR process means that your small business will never be able to attract the right kind of talent. This means that you will never be able to get the best and highly productive professionals to join the organization.
- In small businesses where the HR is not there, the business owners have to, unfortunately, take hiring decisions. This leads to the business owner spending unnecessary time and energy on the process.
- If your small business suffers from issues of sexual harassment or other controversial problems, you might attract legal notice as a business. working with HR means that there are set norms and processes to tackle these concerns.
The Bottom Line
In the past few years, many small businesses have woken up to the reality of human resources. They have understood that investing in HR teams and professionals is important. The realization that this can improve productivity for a business organization is being slowly felt. If you would like us to share any more details on HR processes, let us know in the comments below.
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