Ten Common Human Resource Mistakes Made by Small Businesses (Part 2)

In corporate America, the HR department performs many functions integral to the success of failure of the organization.  Whether the focus in on hiring, development, succession planning, adherence to specific legal requirements or safety, human resource managers help big companies become more profitable.  But all too often, these same tasks are forgotten or ignored by individuals starting a small business.  The effects of not planning for or reacting to HR situations can be catastrophic for a small business.  Yesterday, we explored the first five of ten common Human Resource mistakes that small businesses often make.  Today, we will explore the second half of the list.

1. Hiring Based Only on an Applicant’s Resume/Referral:  So your best friend’s neighbor needs a job.  You need someone to do a particular job in your business.  Should you hire him or her?  At this point, you don’t have anywhere near enough information to say either yes or no.  Before you hire anyone, you need to know exactly what the employee will be responsible for performing; how you will measure his/her performance; what job related attributes are required for success in the job; how will the candidate fit in to your company; if the candidate has a background that will put you and/or your customer’s at risk; etc.  The hiring decision is far too important to make on happenstance.  You need set criteria to both hire the right person and to make sure your hiring practices are legally defensible.
2. Overlooking the Importance of Training:  Now that you have hired an employee, how do you make sure he or she will perform the job in the way you envision the position?  Are his or her expectations the same as yours?  Do they really know what they are doing?  Can they do the job safely and repeatedly?  Remember, if your employees are the face of your business to your customers, their behavior and competence is what your customers will think of your business.  Taking a chance on the new employee just happening to do the job  in the way you expect while producing the results you expect is like playing Russian roulette;  you may be safe for a while, but eventually you are going to kill your business.
3. Failing to Understand Your Leadership Style:  Do you talk to people or at people?  Do you delegate or do everything yourself?  How much structure do you desire?  Do you lead through a hierarchy where the boss is always right?  Or do you empower your employees?  How do you handle ambiguity?  What about errors?  Are you extroverted or more introverted?  Do you communicate face-to-face or through email?  How comfortable are you with change and conflict?  Before you start to launch a business, hire people and deal with customers, you need to have a firm understanding of who you are and what you want before you can expect anyone to follow you.  Remember, if you are a leader and nobody is following you, you are really just out for a walk.
4. Not Fully Understanding Your Business before You Start to Delegate:  Most everyone who has ever worked in Corporate America has at one time or another, worked for someone who knew far less about their job than you knew about their job.  How motivated were you when you constantly had to correct his or her direction?  If you don’t know how to do the job(s) in your business, it is impossible for you to set standards for performance for your people.  In essence, your people can tell you anything about your business and you will have no idea if they are right or wrong.  You don’t have to be an expert, or be the best, but you have to know enough to know what can and can’t be done.
5. Failing to Recognize the Accomplishment of Your People:  Everyone is motivated by the chance to do something in life that means something.  Nobody wants to spend their entire workday working in a job that has no meaning and offers nothing of value to anyone.  People also don’t respond well to consistent punishment.  If you really want your employees, vendors and partners to perform in a specific manner, praise and reward them for a job well done.  Do you also need to redirect behaviors or performance that didn’t meet a certain expectation?  Absolutely.  But correcting behaviors should be a much smaller part of your interactions with your employees than recognition.  Remember, you can catch more flies with honey than you can with vinegar. 

By focusing your attention on the HR activities of your business, you can help ensure the very survival of your new venture.  These ten issues are just the tip of the iceberg of issues that small businesses need to address when starting out.  Forgetting about the HR requirements of your new business can cost you everything you have worked towards.  Just hoping you won’t get sued, is not a plan.