Posted By:

Trish Barnes on May 3, 2016

Five HR Mistakes to Avoid in Your Small Business

Small businesses are often at a disadvantage in the Human Resources department, when compared to larger corporations. Typically, small businesses lack a formal HR department to oversee matters and ensure compliance. This is problematic because making the wrong mistakes can create inefficiencies, hurt productivity and potentially leave you open to costly litigation. There are five particular HR mistakes to avoid at all costs.


1) Misunderstanding or Ignoring Employment Laws

A myriad of federal and state laws govern nearly every aspect of business, including the number of hours employees can work, what constitutes discrimination/harassment, safety protocol and so on. As an employer, it’s critical that you fully understand all applicable laws and stay abreast of any changes. If you don’t, you could be inviting penalties or lawsuits that could harm your business. If time is an issue, consider enlisting the help of a professional HRO agency.


2) Lacking or Failing to Update Workplace Policies

A set of policies establishes boundaries and guidelines for your employees and helps keep behavior in check. Formal policies include a dress code, employee benefits, or specific grounds for termination.

If you’ve never created policies, make it a top priority. It’s also a good idea to revisit your policies each year to ensure they are up-to-date and accurate.


3) Inadequate Documentation

In a litigation-happy society, it’s important to do everything possible to protect your small business from lawsuits. Thoroughly documenting things like employee misbehavior and poor performance is one of the best ways to do this because you’ll have something tangible at your disposal in the event of a lawsuit.

Unfortunately, it’s common for small businesses to slack in this department simply because of the effort it takes to maintain documentation. If this sounds like your business, you’ll definitely want to become more diligent about this. Find advice from the All Business website.


4) Ineffective Onboarding

An effective and efficient onboarding process that’s standardized is essential for equipping new hires for success and getting them started out on the right foot. However, many small businesses lack adequate orientation programs, causing new hires to begin with ambiguity rather than clarity.

If you’ve been skimping on orienting your new employees, it’s wise to develop a comprehensive system for employees to receive the training, educational materials and support necessary to succeed.


5) Asking Unacceptable Interview Questions

When conducting interviews, it’s only natural that you’ll want to uncover as much information as possible to determine whether or not a candidate would be a good fit for your company. Keep in mind the limitations to the specific questions you are legally restricted to ask.

For instance, questions pertaining to a person’s race, religion, age, national origin, etc. are not permitted. Basically, anything that could be deemed as discriminatory should be avoided.


Although your small business might not have the same advantages as that of a formal HR department at a large company, that is no excuse to take HR lightly. By understanding which HR mistakes to avoid and taking adequate measures to do so, you can eliminate a lot of problems and run your business with greater peace of mind.