Are you starting a small company and think you can handle the hiring, firing, and routine human resource (HR) issues yourself? What’s that? You thought human resources was only for big companies with lots of people. You don’t need anyone specially trained to cover that area because you use a payroll service or a professional employment organization (commonly called a PEO). Any of these ideas could be a costly mistake. In fact, it could be a mistake large enough to cause your company to fail. Let’s talk about why.
We’ll start by defining what I mean by payroll service versus a PEO, and what they do. Payroll services and PEO companies are not usually on-site in small businesses. Often, they don’t even have a local office. That leaves you to determine when to call for help from a professional and frankly, that’s usually after trouble arises. If you contract for payroll services, they process payroll. They don’t deal with other HR issues. A PEO handles a full range of HR functions, but the services are often from a distance. On-site help may be an option, but the fee will be an additional expense too. What’s often missing completely is the area most of us know as an employee assistance program (EAP).
The majority of employee problems start subtly with people avoiding dealing with a specific person or an employee that always eats mints. Someone on-site who sees the staff regularly is in a position to notice changes and patterns. For example, eating mints may be because she had garlic for lunch, or it may be because she’s drinking during the workday. One is a problem and the other isn’t. Someone on-site is in a position to watch for changes in behavior and attitude that may indicate inappropriate use of alcohol or other drugs, or an attitude that may cause others to avoid dealing with her. Are watery red eyes from allergies or a hangover? A few subtle questions can often clarify the issue. However, this is just a simple example.
It gets more complicated when the employee with a problem is a supervisor or manager, especially over the HR area. It’s important to always have more than one avenue of trusted communication. Do otherwise good employees, contractors, or vendors keep quitting or getting let go for some reason? Could it be because they may have a valid professional opinion that you hired them to give, but a manager doesn’t want to be wrong? Or, are they leaving because they have no way to voice their problem because their supervisor IS the problem? Do customers give vague excuses for not doing business with you? Does a vendor avoid going to lunch if a specific employee will be present? If there’s a repeat pattern, it may be a people problem and not a product problem. Don’t be naive and miss patterns that tell you when you have a problem.
The most serious problems develop over time. For the same reason family members are usually the last to see a problem, co-workers and employers may not see a problem, unless it’s very visible, and by then, it’s visible to the public too. Why? Perhaps, it’s because that person has been there for years and never had a problem in the past or the individual has learned to cover it well. People change for a number of reasons. Other times, there’s no apparent reason that a social habit slowly grew into an addiction. Think about high profile individuals with money and power who party too much, treat people horribly, and think they’re above the law. Many of them die from overdoses or eventually kill someone in a DUI accident. Other stars and entrepreneurs develop charitable foundations. Success can breed charity and growth or self-destruction. In either case, the changes don’t happen overnight.
Whatever the cause, your company is liable for many actions of the employees. (Please, tell me you carry liability insurance.) An employee who has an accident in a company vehicle will sky-rocket your insurance. Of course, it will be even worse if that person is transporting vendors, customers, or other employees. That’s not when you want to find out that she’s driving while impaired. Other times, the problem may cost in different ways. What if she gets annoyed when a customer says no, or she refuses to listen to the expert you just hired in another department? A bad attitude, arrogance, or poor social behavior alienates people. Some customers and employees won’t tell you their problem. They’ll make up an excuse and move on. In any of these cases, the person who may have been a great asset at one time has become a liability.
One of the key components of HR management, and general office management too, is communication. HR establishes consistent policies and communication standards, complete with form communications, documentation, procedural manuals, and time-lines for specific events. Consistency keeps you out of trouble and out of court. HR also establishes rules and procedures for the progression of key events, such as disciplinary actions, and even what the company does in the event of the death of a co-worker or a local disaster. Some of these things can’t easily be designed to fit your business and integrate with your work-flow from a distance. Employee assistance is not included and most companies don’t have anyone on staff that’s qualified or trained to deal with that type of problem. Therefore, the tendency is to use a loose top-level outline and ignore the rest.
Really small businesses usually flounder for alternatives to help bridge the gap between getting started and wimping out on the whole HR and EAP process. What can you do that you can afford? One solution is to find a good office generalist who can wear many different hats. Some take on duties as diverse as dog walking without a problem. Many experienced administrative assistants also handled HR extensively, before it became a duty that was outsourced. Other times, you can get a student from a college who’s studying HR management and wants to hands-on experience. This doesn’t necessarily mean that it’s the student’s first job or that they don’t already have substantial HR experience. It varies with the student and where they are in their educational process, and he or she can organize the procedures and educate you too.
You might also look for an HR professional who doesn’t want to work full time because of small children or an elderly parent. It isn’t necessary to be in the office five days a week to see problems and documentation work can be done remotely. However, that doesn’t make the person a trained counselor who will resolve the problem on their own. The key is to have someone available who can tactfully and maturely guide a person with a problem toward help. Whatever you do, don’t be blindsided with a costly problem by ignoring the need to address this area.
For additional information and resources about HR issues, check out the previously recorded webinars and information at this link. If you want to know more about what an EAP does, this is a good link.
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