We have been working with small businesses for near on 10 years. We are a small business ourselves so we know the myriad of challenges business owners face from navigating complicated and ever changing industrial relations laws to dealing with difficult employees and everything in between. In our experience there are some common mistakes small business seems to make and here they are:
- Not having proper HR structures in place is probably the most common mistake. That is no contracts of employment, no policies and no position descriptions. Lack of structure leads to performance issues, a lack of accountability and ultimately money down the toilet. Most employee issues can be avoided through clear expectations. So, don’t leave this stuff to chance.
- Unknowingly breaching Award conditions and underpayments of wages is another common one. Most business owners don’t realise that their employees may be covered by multiple Awards. So, if you have administration, sales and production employees you will be covered by 3 different Awards. This mistake can lead to wage underpayments (particularly) in regards to overtime and penalties and can lead to employee claims and fines.
- Poor recruitment decisions – Small business seems to suck really bad at recruitment (who doesn’t it can be a dark art). This is usually due to no process being followed or decisions being rushed out of desperation. Our motto is hire slowly, fire quickly.
- No accountability through unclear performance expectations. Most small business don’t hold formal performance appraisals and therefore don’t measure performance. This leads to missed opportunities and unproductive employees. You can’t manage what you can’t measure.
- Lack of discussions around career development – we find many small businesses put off having these conversations with employees out of fear, thinking they are too small to provide promotion opportunities but ultimately career progression and development can come in many forms. Allowing employees opportunities to work on projects to develop new skills, providing an internal or external mentor, or doing an external course are all forms of development and send a strong message that you care about your employees all building loyalty.
- Finally the biggest mistake we see is a lack of feedback, in fact many Managers only provide feedback when an employee has made a mistake or done something wrong creating a culture of fear and disengagement. We find feedback to be the single most important factor in terms of employee engagement and motivation. And better than that it is absolutely FREE. Saying thank you or well done is easy, effective and has maximum impact.
So as a Business Owner or Leader improving on any of these areas will ensure you are managing your people assets for maximum effect. If you need help don’t hesitate to give us a call.