As a business owner, you have the challenge of taking on different responsibilities on a daily basis. Owners of small and medium enterprises (SMEs) usually have to perform multiple functions, from the accounting of the company to the management of human resources. Whether you are the person in charge of this field or delegate it to someone else, your company may be making several mistakes. These errors in your Human Resources management can have devastating consequences for your company – from legal actions to high turnover costs.Therefore, it is extremely important that you make sure that your company avoids these common and often costly mistakes.
Here we explain 5 mistakes SMEs in their human resources management
1. Do not hire the right people for the job
Some owners of SMEs, instead of doing external searches to find quality candidates, end up hiring only acquaintances or associates for their vacancies. Maybe it’s because you do not have the financial resources and this makes you choose not to do data verification or confirm the references of the candidate to verify the veracity of the information included in his resume, or maybe you simply feel bad for the person and would like to help him get a job. Either way, hiring the wrong candidate can be expensive. Not only will this person not be properly qualified for your position, but you will also have to replace it in the future, which adds an additional cost to your human resources expenses.
2. Do not create clear job descriptions
When you create a vacancy for a position, you also have to create a job description. However, owners of SMEs forget to create charge descriptions that are clear and truthful. This step is important to ensure you attract the best talent in your company. Your job description should include the skills, experience, and education that the ideal candidate should possess, and you should proceed to the interview process only with those candidates who meet these requirements.
3. Not taking into account or document performance problems
If you have employees whose performance is showing problems, do not ignore them waiting for these problems to disappear on their own. You must implement performance evaluations with correction plans so that your employees know in which areas they should improve. In the same way, make sure to deal with the problems that appear immediately, do not wait. If you document all these problems in writing, you are also collecting information that will be useful in case of a dismissal due to poor performance is necessary.
4. Not knowing basic labor laws
In human resources, there are many laws that most SMB owners do not know, and doing so can be extremely harmful to your company. Make sure you familiarize yourself with laws regarding:
– Discrimination in the work area
– About time and minimum wages
– Discrimination by age and gender
– Differences in payments based on genres
– Job security
– Pregnancy discrimination
Never assume that labor laws do not apply to your company. Ignoring them can generate very high costs for your small or medium business.
5. Misclassify your employees
Do you know the difference between a contractor, a full-time employee, and a part-time employee? If the answer is no, you should familiarize yourself with these terms. The labor relations department, as well as the entities that are responsible for regulating taxes, have strict requirements for different types of employees. Do not try to classify your employees as contractors simply to avoid the benefits. The responsibilities and the salary of the employees are those that determine whether or not they are permanent employees. In general, a person is only an independent contractor if:
– You have no control over the work they do.
– Do not have written contracts, benefit plans, or holidays described.
– You don’t control the financial aspects related to the worker’s duties.