Common HR Mistakes

Starting a business inevitably means juggling several things at once and you want to avoid HR mistakes from causing you problems.

Quite often one person will have many hats – project manager, sales person, and HR manager to name but a few and – particularly in the first few years – getting expert help and advice wherever you can is a great idea. There’s simply not time to make every mistake yourself, so sometimes it pays to learn from others’!

With that in mind, we’ve listed five of the more common HR mistakes made by small businesses and start-ups and give some tips on how you can avoid them.

1.  Failing to thoroughly vet applicants when hiring staff

The staff you choose for your business can make or break it but one of the most common small business mistakes is to hire too quickly.

When your business starts expanding and you need someone new onboard to keep pace with the workload, it can be tempting to hire the first person that seems reasonable and available without thoroughly checking their suitability for the role.

There’s a good reason why larger businesses sometimes take months to find someone for a role. Hiring is a delicate process that assesses not only the skillset of the future employee but also whether their work ethic and personality are a good fit for your business.

If you’re business is a start-up, you need someone, for example, who can be enthusiastic about your product or service and who is prepared to pull their weight. Recruiting somebody you end up having to support extensively can pose bigger problems than simply managing the extra work yourself, so take care to hire a candidate with the right abilities and attitude.

2.  Not setting up a staff management system

Once staff levels have moved up beyond three or four members, one of the best pieces of HR advice for small businesses is to invest in a staff management system.

It’s easy to overlook this until a holiday clash arises and you find yourself with a shortage of people to complete the work. Not only does a staff management system help you avoid such situations, it can also assist with shift planning, sickness, and overtime.

Having a proper system can significantly reduce the amount of admin time spent on planning and chasing work, ensuring that everyone knows where they need to be and when and that work is completed in a timely manner.

3.  One of the most common HR mistakes is ignoring the legals!

A sound knowledge of employment law is especially important when your start-up begins to take on employees. It’s all too easy to assume you’re doing the right thing where in fact you are falling foul of a law or regulation – particularly when it comes to your responsibilities towards your team.

A much-publicised example is auto-enrolment. Even a business with just one employee is now required to auto-enrol its staff onto a pension scheme and make provision for their future. You may think that as a micro business you can overlook this but all your employees have a right to some security in later life and it’s now your responsibility to provide it.

Even issues such as working hours and overtime have specific regulations around them, so being aware of these is essential. Speaking to a specialist is recommended in order to ensure you’re not accidentally contravening the law.

4.  Not considering team personal development

It’s easy to fall into a trap of continually promising more to your employees once you become more successful and then constantly moving the goalposts and failing to keep your promises. Employees then begin to feel forgotten and unappreciated.

To do this is to be guilty of one of small business’ human resource management failures.

Employees, especially those who are younger, are keen to advance their careers and enjoy personal development along the way. As such, it’s essential to offer staff opportunities to improve and advance, whether that’s on training programmes or moving up through the ranks of the business.

You might, for example, set a budget aside for training or conferences and allow staff to engage in a set number of courses or programmes per year. Or you could give them the opportunity to build their own teams and employ their own staff once expansion becomes necessary.

Staff who feel valued and believe they are being given adequate opportunities to progress are much more likely to stay within your business. Having to constantly replace disgruntled staff who have left is never cost-effective for any business.

5.  HR mistakes – Failing to offer any employee benefits

Part of what makes working for a business enjoyable is the perks that come with the job. These don’t need to include company cars, gym memberships and the like if your budget won’t stretch to it but there should be some additional incentive to work for you – besides an annual office Christmas party.

Research what other businesses of similar sizes offer and try to compile a competitive package. This could include anything from flexible working or subsidising a snack bar to discounts at local shops or approaching a local yoga teacher or massage therapist to provide lunchtime sessions.

Showing an interest in rewarding staff and taking concern for their wellbeing will encourage them to be productive and incentivise them to stay. If they feel looked after and valued, they’re far less likely to search elsewhere for a better option.

Seek advice from professionals

With starting a business being so time and resource-consuming, it can be easy to let your HR duties slip while you chase the profits. You can reduce the chance – and the impact – of this by avoiding the above mistakes and by ensuring that your setup is scalable and suitable for the type of business you run.

At THP Chartered Accountants, we can help those setting up business ventures to ensure they have the right structure to enable them to grow and to focus on their services and staff from the outset. Our accountants can advise on which structure to adopt, while our legal team can arrange the paperwork.

Contact us today to give your business the best possible chance of success. We have offices based in Sutton, Chelmsford, Wanstead and Saffron Walden.

Need further advice on any of the topics being discussed? Get in touch and see how we can help.

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    Avatar for Jon Pryse-Jones
    About Jon Pryse-Jones

    Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.

    An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”

    Jon’s appreciation for THP extends to his fellow team members and the board.  “They really know how to run a successful business,” he says.  He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.

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