Top 10 HR Mistakes Companies Make

The Human Resources department is critical to all businesses. As the department sitting at the intersection of employee safety, training, morale, and compliance, HR functions have increased in importance and scope. Unfortunately, many companies may not realize their importance until things go terribly wrong. 

Companies may experience high litigation costs if they don’t comply with federal regulations or hire the wrong employee for the job. For small and midsized businesses, defense and settlement costs can be thousands of dollars and take almost a year to come to a resolution. Even just onboarding a new employee is a costly process. However, when good policies and procedures are in place, a good HR department will help hire the best staff and retain them. 

These are the top mistakes that HR departments and staff typically make. 


1. Lack of Formal Policies and Procedures 

The root of many mistakes by HR is a poor definition and guidelines on how to handle most common workplace situations. It’s likely that policies won’t encompass every situation you may encounter, but they should provide direction and guidelines on managing most daily interactions. For example, HR policies should address a code of conduct, dress code, cell phone usage, and other daily tasks. It should also discuss legal requirements, government regulations, and how the company provides consistent and fair treatment. These policies should be given to every employee upon hire as well as being available and accessible as needed. 

2. Out of Date Policies 

A policy will only be a useful tool if it’s kept up to date with the most recent updates and regulations. The Department of Labor doesn’t require that businesses have a physical handbook, but they must display posters that provide details on key areas of compliance such as FMLA, wage and hour, etc. The Department of Labor does offer a basic toolkit that’s handy for keeping policies in alignment with federal guidelines. However, HR departments also need to be proactive in this area. They need to update their regulations and review policies at least annually to ensure that they meet standards. 

3. Not Onboarding Appropriately 

Onboarding occurs when employees are introduced to the company and educated on its culture and policies. This ensures that each employee understands their job duties, functions, benefits, and other essential information. Top performing companies have structured onboarding that informs employees of essential information they need to know to succeed in their jobs. While onboarding may seem like it can be simple, having a comprehensive plan is a great idea. Onboarding should be documented and signed off on by the employee and supervisor to prevent lawsuits and any new hire problems. 

4. Not Planning for Retention 

Losing a good hire costs the company thousands of dollars, so hiring isn’t the only important function of HR. Good companies know that they must take the time to determine what motivates their employees and create individual experiences that are tailored to those motivations. Research shows that some of the top needs are job security and financial stability, having a good work/life balance, and being rewarded. However, each HR team needs to dig a little deeper in their own companies to find a strong motivator and then plan accordingly to increase engagement and avoid having good staff leave. 

5. Hiring Bad Staff 

Hiring the wrong staff isn’t just a problem; it’s a costly drain on the entire company. However, it’s relatively common. Almost three in every four employers say that they’ve made the mistake of hiring someone wrong for the job. Having a bad hire, especially in a small business, can drain productivity, increase workloads on the rest of the staff, and kill motivation. To lower the chance of this being a problem, make sure that the right people interview the candidate. Always check references and perform multiple interviews, especially for more technical or skilled areas. The HR team can guide departments through this process and ensure that only the best hires are offered positions. 

6. Limited or Poor Job Descriptions 

One common cause of a bad hire is that the job an employee accepted isn’t really the one offered. Misalignment and poor communication are common problems between recruiting, hiring managers, and the supervisor in the department. The daily duties of the job may not map to the person’s skills or expectations provided in the hiring process. Always review the job description with the person’s supervisor or co-workers before posting to ensure that it’s accurate and contains enough information to describe the job as well as possible. Taking the time and effort to do this will help avoid hiring the wrong person for the job. 

7. Not Documenting Performance Issues 

Documenting performance issues may seem like a minor problem, but it can turn into a huge one. Employees should receive regular communication about their job performance. This is valuable information to have, and they should also know where to focus on improving their work. Employers may need this information in case of litigation. Documentation should include the employer’s expectations, how the employee did not meet those expectations, the process used to counsel or discipline, and the consequences of not meeting the stated expectations moving forward. Companies who fail to document this may find out that their terminated employee can sue, and they do not have the documentation to back up their reasoning for the termination. 

8. Incomplete or Missing Employee Records 

Retaliation is the most common charge that is filed with the Equal Employment Opportunity Commission (EEOC). This is closely followed by disability, race, and sex discrimination. Suppose an employee decides to bring up a retaliation claim against the company. Documentation of the employee’s work history and any actions taken are essential. HR should ensure that they’ve kept track of performance improvement plans, disciplinary actions, and coaching conversations. If they go missing, companies will likely not be able to claim that termination was justified and may lose a case. 

9. Inadequate Training 

Training is often essential for new hires but can lapse when it comes to employees who are already on staff. Not only is training essential to keep up to date with the new regulations, but it’s also a good tool that can be used to retain good employees. Keeping staff engaged by learning new skills and expanding their career is a smart move. Most companies will pay for continuing education or provide other advancement and learning opportunities. At the very least, companies need to provide training on critical regulatory areas. The best way to do this is by having annual mandatory training. It can be tailored for each department as needed. There should also be optional training that can be used to expand a person’s career. HR should track and manage these opportunities to ensure employees remain engaged with the business. 

10. Not Securing Data 

Organizations are under constant attack from scammers and phishing. They face huge risks when it comes to data theft and breaches. Just like companies may fail to embrace diversity and inclusion, they may also fail to protect the information of their employees and the company itself. Stolen employee information can be easy to gain, and many companies have had their information stolen when employees share emails or passwords unknowingly. This is the most common cause of a malicious breach. HR should ensure that employees are regularly trained on the best practices for data security. Passwords should be required to be strong and frequently updated to decrease the risk of a successful attack. Some companies may even set up tests for employees to ensure that they can recognize the signs of potential theft. The security of the IT for a company should be seen as essential and ensure employees also know how to avoid these attacks. 

Since HR is an essential and potentially costly area for companies, focusing on having a great HR department is well worth the time and effort. Companies should ensure that they hire competent HR staff. However, this may be expensive and time-consuming, especially for smaller companies. They can also decide to outsource their HR needs to a service provider, saving time and money. Regardless of the option chosen, steer clear of these common HR mistakes. 

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About Emplicity:
Since 1995, Emplicity has provided a smarter, more secure, and integrated platform of employer services to its 300 business clients and their 8,500 employees. As a Professional Employer Organization, or PEO, the California-based HR outsourcing firm simplifies the compliance, administration, and support businesses need in the areas of employee benefits, payroll, and human resources technology.

NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of its clients.

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