For many small businesses, human resources (HR) issues come almost as an afterthought. Just because they are small, they feel that there is no need to stick to the rules. This is wrong. Human capital is the greatest, most valuable asset that any company has. Nothing happens without the employees. They are the lifeblood of the organisation. In this article, we take a look at some common mistakes that small businesses need to avoid when it comes to HR.
1. Hiring relatives and friends
The temptation for most small businesses is to recruit their young brother or friend. They think that having a relative or friend in the company helps protect their investment as this person will always call out any wrong doing by other employees. As many entrepreneurs will tell you, this is rarely a good idea. Firstly, if your relative messes up, it becomes very difficult to reprimand them without straining the relationship that you already have. Secondly, because the person is your friend, you may not insist on them having the qualifications and experience for the job. This will lead to poor performance down the line. Rather, you have to hire people on the basis of their merits, qualifications, experience and capabilities, not your relationship.
2. Failure to provide a written employment contract
A formal written contract of employment is the first and probably most important document that regulates your professional relationship with employees. Apart from stipulating the conditions of service, it formalises the employment relationship. More importantly, a contract is a requirement of the Labour Act in Zimbabwe and many other countries. Down the line, you will notice that a well drafted, comprehensive contract will avoid any legal nightmares that may emanate from sour employment relations. With a contract, each party knows what is required from them without a shadow of a doubt. Imagine, an employee just being told their salary by word of mouth. This lacks professionalism and seriousness from the onset.
3. Failing to follow laid down procedures
Employment law prescribes certain procedures that must be followed when dealing with specific occurrences. For example, when you want to retrench staff, there are procedures for doing that legally. The same goes for disciplining employees or for leave administration among others. Large corporates augment labour laws with their own company policies and procedures which are tailor-made to suit their environment. This is commendable and should be encouraged even for smaller businesses. With clear procedures, you can deal with issues in a uniform and consistent manner eliminating any suspicions of favouritism. Inconsistencies and failure to follow procedures are likely to lead you to litigation and this will cost your company time and money.
4. Ignoring training
Training is one of the most important HR facets for any organisation nowadays. Rather than being just ad hoc, training should be planned, monitored and evaluated in order for its effectiveness to be ascertained. Technology develops and changes fast. Operating procedures also evolve over time. Because of that, your employees need to keep abreast of any changes in their industry. If you are to remain in business, allow your employees continuous opportunity to improve their skills. Many professional bodies have now introduced Continuous Professional Development (CPD) so that professionals are kept in the loop of any developments happening around their profession. As a small business, you should enable your employees to be part of CPD programmes in their various professions. This makes employees more productive as their skills are always top notch. In addition, employees feel valued and motivate to perform if they are trained.
5. Failing to pay employees on time or at all
Small businesses often do not have enough money to cover all financial obligations at the end of the month. In Zimbabwe, a contracting economy makes things worse. Failure to pay employees on time or at all is a sad reality. It is illegal though. It also leads to costly work disruptions if employees decide to withdraw their labour. Disgruntled workers are difficult to manage. They will not put in enough effort and the quality of their work decreases sharply. As such, any small business should do everything possible to pay employees and pay them on time all the time. Have a strategy that allows you to have enough money to pay your employees even after a bad month.
6. Do not overwork employees
The temptation for small businesses is to keep employees at work for long hours just because you want to produce more. Employees are human beings who need to rest and recuperate often. This is the reason why the Labour Act prescribes several leave provisions. You need to adhere to these. When an employee falls sick, let them see a medical practitioner and if the practitioner recommends rest, grant them leave to do so. The same goes for funerals and other events. Employees who are allowed rest when they have to will surely perform better than those who overwork. Imagine a driver going for a 24-hour journey without rest. Chances of an accident become high and this is not good business. Employees are not machines. Even the machines need maintenance and repair once in a while too.
Maintaining a happy and motivated workforce should be every business’ dream. Being small is not an excuse to cut corners and disregard the rules. If anything, being small should make it easier to manage your HR.