On August 2nd, OneGroup hosted another 101 Series Webinar. Experts Colleen Williams and Travis Simpson spoke about human resources, how to implement effective human resources practices, and how to actively manage your human resources risks.
Since the late 19th century, human resources have existed to provide structure for an organization and have served as an engine to keep operations running smoothly. During the Industrial Revolution, the staff on a human resource team was known as “welfare officers.” This later shifted to the term, “labor manager,” in the early-to-mid 20th century. Around the mid-1940’s, the term labor manager eventually transformed to “personnel management.”
It was not until the 1980s that human resources became known as human resource management. Since the early 2000’s, human resources management has become much more strategic and has shifted to a multifaceted, proactive, all-encompassing resource.
Some HR functions include but are not limited to:
- Administrative responsibilities
- Human resource planning
- Recruitment & selection
- Performance management
- Learning & development
- Career planning
- Function evaluation
- Employee rewards
- Industrial relations
- Employee participation & communication
- Employee health & safety
- Employee well-being
Visit the SHRM Resource Hub for more specific HR topics.
What are some common human resources mistakes or risk areas?
Company Handbooks
Employee handbooks can aid in minimizing risk for the company and your employees. One of the biggest risks is not having a handbook at all. This can result in unclear, inconsistent expectations, having employees and managers rely on memory, etc. Sometimes, companies can survive without one for a long period of time. However, one issue and one problem can snowball and cause a much bigger issue.
Having an updated, concise employee handbook can limit the number of issues between companies and employees as well as establish boundaries and limit miscommunications. It is one of the easiest ways to decrease your empoyee-centric risk. However, just having a handbook does not mitigate all risk. Use your employee handbook as your back up! Communication issues with employees can be difficult. Use your handbook to back up your processes and decisions to ensure consistent communication.
See below for some more risks and mistakes that you should try to avoid.
- Lacking inclusion of all policies and/or all regulatory updates – This can result in outdated company information. Outdated policies or omitting policies all together can muddy the waters and make miscommunication between the employee and employer a repeated issue.
- Omitting disclaimers – It is important to incorporate language in the handbook that offers flexibility depending on each situation. Omitting disclaimers that begin with statements such as, “management reserves the right to…” can increase miscommunication and lead employees to believe that they are being treated differently when you choose to activate those disclaimers. The most prominent example is not addressing at-will relationships.
- Having an overly restrictive confidentiality/social media policy – There are always new policies that are coming into the realm of social media publishing, so it is extremely important that human resources managers are staying current. However, having overly restrictive policies are also harmful so, finding the balance between regulation and freedom is key.
Misclassifying Workers
Classifying workers is an important part of maintaining best practices in human resources operations.
Two examples of misclassification of employees are the errors associated with Employee vs Independent Contractor and FLSA Status Exempt vs Non-Exempt.
- Employee vs Independent Contractor – Misclassifying workers can result in incorrect payment, improper filing of appropriate tax forms, errors in benefits offerings, lack of protections under OSHA, ADA, NLRA, lack of correct Workers Compensation premiums, and associated fines and penalties to the company.
- FLSA Status Exempt vs Non-Exempt – This incorrect classification can result in failure to pay required overtime, miscalculation of which compensation is included in said overtime, and associated fines and penalties to the company.
Regulatory Compliance
The mistake with regulatory compliance is not understanding how many regulations there are, but instead having the correct practices in place to support and make sure these regulatory practices are up to date.
Federal Regulatory Laws Include:
- ACA
- ADEA
- ADA
- CCOA
- COBRA
- EEO-1
- EPPA
- ERISA
- EPA
- FMLA
- FCRA
- FLSA
- GINA
- ICRA
- OSHA
- PDA
- Title VII
- USERRA
- WARN
- State Laws
For more information on federal regulation in HR, click here.
Recruiting & Hiring
In the professional world today, recruiting & hiring has become inherently more difficult and proposes a real risk for businesses from a human resources standpoint. Recruiting & hiring snowballs into issues such as productivity disruptions, unqualified workers, backfilling positions, and more.
Below are some of the most common exposures to these risks:
- Asking illegal questions – There are legal requirements to comply with during the application, interview, and offer process. Interviewers must be trained and should pay attention to laws in their respective state.
- Failure to remain compliant with ICRA – ICRA is the Immigration Reform & Control Act (I-9 Employment Verification) and is amended often.
- Poorly defined job description or posting – This can result in “bad hires” which can have an adverse impact on business operations such as lost productivity, lower staff morale, monetary cost of turnover, and can also affect risk discrimination claims.
Onboarding & Training
There are quite a few common mistakes made when in the process of onboarding and training newly hired employees to a company. Poor onboarding can result in lower productivity, increased turnover, increased monetary costs, and low employee morale. Assuming employees onboarded well increases a business’s risk for loss from an employee who is not performing to standard. It takes time, effort, planning, and positive intention to successfully onboard and train an employee at all levels of the business. Additionally, it is also important to expose new hires to company, department, and team culture as this can be just as important for understanding the job itself.
Performance Documentation
Not documenting performance reviews, performance concerns, disciplinary discussions/actions, investigations, and termination decisions can be detrimental to a business’s decision-making and daily functioning.
Gold Standard Disciplinary Policy:
- Progressive disciplinary policies – Included in handbook, in the event of performance issues the employer can give counsel, verbal warning, written warning, or eventually result to termination when handling this type of risk. A verbal disclaimer is necessary to inform the employee of performance policies.
Leadership Development
Lack of leadership development, although not a regulatory compliance, can be very pervasive especially if you are a larger employer with many layers of management and leadership.
Effects of lack of leadership development:
- Employee engagement suffers – No employee motivation skills results in poor employee engagement.
- Innovation is lacking – Lack of strategic thinking skills leads to poor innovation..
- Empty leadership pipeline – Deciding against succession planning can cause a large leadership gap within a business.
- Customers suffer – A poor employee experience is directly coincided with a poor customer experience.
- Digital transformation is stagnant – When a business is lacking digitally literate leaders, company performance can decrease drastically.
- Workplace safety incidents – Without the proper supervision by upper-level officials, workplace safety culture can nosedive and results in increased incidents.
- Other – Increased turnover, lack of accountability, employee development suffers, lack of inclusive work environments, and employee burnout.
Toxic Employees
A toxic worker is defined as someone who “engages in behavior that is harmful to an organization, including either its property or people.” Toxic employees are common issues human resources managers are faced with in the workplace. These workers crush other team members’ self-esteem, sabotage success, make others question their decisions, interfere with teamwork and collaboration, demoralize staff, and corrupt the workplace culture further stifling innovation, creativity, and collaboration. On average, roughly 10% of a workplace does 90% of the work, while 80% of time is spent on 20% of employees. Choosing to not address or remove this characterization of employee can be quietly or loudly detrimental to a workplace, team, department, or company as a whole,
“Avoiding a toxic worker, or converting them to an average worker, enhances performance to a much greater extent than replacing an average worker with a superstar worker.” – Harvard Business School (Analysis of 50,000 employees)
How can you avoid common human resources mistakes?
To avoid common human resources mistakes, there are several basic steps employers can take such as creating and maintaining a detailed employee handbook and practicing successful onboarding/training procedures to establish a solid foundation for risk management and compliance. There are extensive resources available for support and education within the human resources field and can be tailored to fit the needs of your specific business.
If you have questions regarding the webinar or human resource management, please email OneGroup@OneGroup.com or submit a quote form here to be connected to one of our experts. To learn more about OneGroup’s HR offerings, click here.
OneGroup is looking forward to the next 101 Series Webinar, Investment & Retirement, on Monday, October 11th, 2023, from 9:30AM – 10:30AM EST. OGRA (OneGroup Retirement Advisors) experts Joe Hatfield, Mike Tisdell, and Michael Campagna will discuss managing your company’s 401k plan in a post-pandemic world. Register for OneGroup’s next webinar here.
This content is for informational purposes only and not for the purpose of providing professional, financial, medical or legal advice. You should contact your licensed professional to obtain advice with respect to any particular issue or problem. Please refer to your policy contract for any specific information or questions on applicability of coverage.
Please note coverage can not be bound or a claim reported without written acknowledgment from a OneGroup Representative.
