HR Errors That Could Cost Your Business Dearly

Once you start to employ workers at your small business, it’s a really good idea to create a HR department and recruit some HR professionals. The HR team will then be able to take care of all your employees’ needs, payroll, and company recruitment. Sure, you could outsource these kinds of tasks to freelancers and agencies, but it really is better to bring all of your HR stuff in-house so that you can keep a watchful eye over it all. Plus, over time, this will work out as the most cost-effective option.

HR errors should avoid
Shutterstock Licensed Photo – By Panchenko Vladimir

However, once your new department is set up and working on all their various tasks, there are a few important errors that they shouldn’t commit. Otherwise, you could find that these errors end up costing your company some serious dough.

Want to make sure your HR department don’t end up inadvertently draining your company profits? Here are some of the most common errors and how your department can successfully prevent them.

Long Recruitment Processes

As your HR department are in charge of recruiting new hires, they will be responsible for putting the whole process of hiring in place. So, it’s up to them how many applicants they shortlist for interviews, and how many rounds of interviews take place. Ideally, you should encourage them to try and keep the whole recruitment process down to as short a period as possible. There should never be more than two rounds of interviews, if at all possible. The longer this whole process takes, the longer all of your HR staff will be spending away from their other responsibilities and tasks. This will reduce the whole department’s efficiency as a whole, which will, ultimately, cost you and your company a lot of cash!

Neglecting Employee Training

Your HR team should also regularly plan plenty of training for all your employees. That way, all of your staff can benefit from learning new skills and knowledge on a regular basis. This can then help them get more out of their working day, which will help them to be much more productive and motivated employees. As a result, your company as a whole will be able to hit more targets and earn more money. So, as you can see, carrying out regular on-the-job training is of a huge benefit to your company. Without it, you might find that the quality of your work starts to slip and you end up losing some important contracts as a result. So, make sure that, no matter what, your HR department are always finding cool new training courses and away days that your employees can go on!

Vacation And Sickness Clashes

All companies are obliged to give their employees the statutory number of days off per year for vacations and sickness. Your HR team will be the ones who plan these days and ensure that no one ends up taking too many days off by mistake. If they do, then they will be costing your company money as you will be, in effect, paying for this extra day off. But that’s not all where all your HR employees come in. They also need to make sure that all of the vacation days are spread out throughout the year. So, for example, that the majority of your employees don’t end up taking the same week in summer off for their holidays. This may not seem like such a big deal on the surface of it, but in actual fact, it could cost your business money by putting such a strain on it. You won’t have as many employees in the office, which could make things very stressful for the ones that are still working as they will need to handle some of their vacationing co-workers tasks as well. Thankfully, there are ways your HR team can successfully manage everyone’s holidays. Using an employee schedule maker will make it easier for them to quickly see when colleagues currently have time booked off. If a couple of people already have the same week booked off, then they can stop taking requests from anyone else for these dates. It’s also important that holiday days are authorized on a first come first served basis.

Excessive Paperwork

There’s no getting around all the different documents and contracts that the HR department will have to work with. Most of these will be to do with your employees and other regulatory processes. One thing is for sure, there is a lot of paperwork to sort out! This can be a problem for your company if you let it become problematic. Getting copies of very important documents can be expensive, so it might be worth scanning all of your hard copies and storing them on the cloud. That way, they are all back upped and easy to retrieve if the hard copies ever get damaged or go missing. Plus, moving to digital paperwork will also save you a lot on printing costs.

Misclassifying Employees

When you hire a new employee, you will need to classify them. This is also the case if you ever outsource and take on contractors and freelancers. Obviously, permanent members of staff need to be classed as full-time employees, which freelancers are contractors. This is all for tax purposes. It is absolutely crucial that this classification is correct in your books. If not, you could end up making incorrect tax payments. Not only that, though, but it could cause the misclassified worker to pay incorrect insurance and tax payments. As your company is the responsible party for this, you will be the one that gets fined as a result. So, it’s always necessary to ensure that your HR team are always correctly classifying your employees. Otherwise, you could be in for some surprise extra fees and charges until the mistake is corrected!

There are a few errors that are ever so easy for your HR team to commit. But, as long as you are made aware of them, you shouldn’t have to worry about them costing your company too much cash!