3 HR Mistakes Small Businesses Make and How to Avoid Them
As a business owner or leader, it's easy to overlook simple human resources issues that can significantly impact employee satisfaction, protect the company and overall impact business success. While many small business owners are focused on growth, innovation, and customer satisfaction, they sometimes make, or ignore, HR decisions that can lead to bigger issues down the line. At People Architects we see three HR mistakes commonly made in small businesses, along with insights on how to address them effectively.
1. Renewing Health Benefits Without Getting New Bids
Benefits are one of the largest expenses in a business and rising at a rapid pace. Many times, small businesses default to renewing health insurance plans without exploring their options and just accepting the increases. This is a costly oversight for several reasons:
● Cost-Efficiency: To start, you have to work to find the best deal. Insurance premiums can change yearly. Sticking with the same provider may mean missing out on better coverage options or lower premiums. Each year, different insurance companies may offer new plans that are more competitive or tailored to small businesses’ specific needs and a partner who can help you navigate these options may help to get you a better program by knowing the nuances of the rhetoric that providers draft for you.
● Employee Satisfaction: As much as a benefit plan is an impact on your company, to employees, it is a massive value and critical part of their life. Having a comprehensive health package can make or break their job satisfaction. By not exploring other bids, you may end up with a plan that doesn’t meet employee expectations, potentially leading to decreased morale or higher turnover.
Solution: Schedule a time each year, at least 90 days before your renewal date, to research and compare different health insurance providers. Working with an HR Consultant who knows how to decode and guide the choices can be a critical step in the process and save thousands of dollars in the long run. This simple step to partner with a team will help to navigate this process, ensuring that you get the best value for your benefits package while catering to your employees' needs.
2. Not Taking Time, Weekly to Meet with Direct Reports
In the hustle and bustle of running a small business, regular one-on-one meetings with team members are often deprioritized.
At People Architects we use a simple Same Page Meeting agenda
How are you? A simple, yet powerful question to start the meeting on a personal level.
What's on your mind? This allows for a quick check-in on any personal or professional concerns
Discuss and Solve Issues: Prioritize issues and work together to find solutions
Having a finger on the pulse of what is going on and making time to understand issues can help to alleviate delays and continue to develop the business faster. If not kept up with, this lack of communication can lead to several issues employee disengagement, missed deadlines, and missed opportunities for employee development.
Solution: Adopt a structured approach to meetings with direct reports. This doesn’t have to be formal; a weekly 15-minute check-in can work wonders. Use this time not only to discuss work-related topics but also to check in on personal well-being, fostering a more inclusive and supportive workplace environment. Let the team know that these touch points are meant to help employees because you care and are listening.
3. Having and Updating an Employee Handbook
An employee handbook serves as a crucial tool in setting expectations and understanding workplace protocols. However, many companies do not have a handbook, or have not updated them in years. Many small businesses create one at the outset, failing to include critical elements that can protect the business and address issues that are constantly changing, leading to several problems:
● Lack of Clarity: An outdated handbook may not accurately reflect current laws, policies, or company culture. This can leave employees confused about what is expected of them, leading to compliance issues or workplace disputes being mishandled. Should an issue arise, a handbook is a playbook that a company can point to as an understood policy. If this is not accurate, not clearly stating key policies or not kept up to date with new laws, it exposes the business to lawsuits and more.
● Communication Breakdowns: A well-maintained handbook is an essential aspect of onboarding new employees, and an outdated one can instill a culture of uncertainty and misinformation regarding policies and employee rights. A handbook should be a place where managers can go to state basic policies and direct employees to understand the rules.
Solution: Make periodic reviews of your employee handbook a part of your business routine. Establish a schedule (e.g., annually or bi-annually) to reassess policies based on changes in laws, organizational culture, and feedback from employees. Additionally, encourage employees to revisit the handbook regularly and suggest updates or clarifications based on their experiences.
Conclusion
Small businesses have the incredible opportunity to cultivate strong relationships with their employees, thereby enhancing job satisfaction, productivity, and retention rates. Avoiding these three common HR mistakes by being proactive with health benefits, committing to regular one-on-one meetings, and continuously updating the employee handbook will not only support your workforce but will also safeguard your business's future. Remember, investing in your human resources is investing in your company’s growth and success.