As an HR consultant, I interact with a lot of small business owners and often hear things like this:
“Wow, we didn’t know we weren’t in compliance on that…”
“Really, you mean we HAVE to pay her for the overtime?”
“I don’t know why I can’t seem to get my employees to come to work on time–and show up!”
“The laws are SO different here in the U.S. In (Italy, Germany, India, Brazil…) things are so different. This is crazy here!”
“It’s getting to the point that there are almost no rights for employers anymore… everything is so pro employee… who wants to run a business in this environment???”
And, there you have it. A garden variety of comments from business owners that I deal with every day. They are frustrated about the current “regulation nation” that we live in in the U.S. There are a LOT of labor and employment laws in place that create a huge compliance burden for employers. And, if small businesses don’t pay attention to this stuff and how to manage employees properly in this environment–it could cost a bundle in the form of regulatory fines, settlements, and lawsuits.
So, here are some words of advice to all small business owners: Make sure you are focused on both Driving Results AND Managing Risk in your business. Obviously, you carry some sort of insurance in the event of a fire or catastrophe, right? So, that’s an element of risk management. However, what many smaller employers don’t know is that failing to have a good HR infrastructure in place means you’re simply not focused on the Risk Management side of the equation. What I’m talking about is having in place as a solid company handbook with policies and procedures, a well trained supervisory team, and an effective performance management structure to hold people accountable. Why is this so important? Because without good HR infrastructure, your business is simply one-sided: Focus on driving results like increasing revenue, cutting costs to increase the bottom line, etc. Great stuff and what businesses should be focused on. However, without watching the other side of the equation in today’s environment, the Risk side could wipe out the Results side–in a heartbeat. One misstep with the Department of Labor on classifying workers could cost you $50k–for ONE employee issue.
So, to get moving in the right direction, start implementing some HR infrastructure in your business in the form of “people processes” such as clear job descriptions with proper employee classification, get a well-written policy manual (aka employee handbook), put in a good performance review process–and train your management team to know how to enforce your company policies and actually manage employee performance.
Until next time…
Natalie Ivey is President & CEO of Results Performance Consulting, Inc. a firm specializing in HR consulting, leadership development, and HR training.