Top HR Risks for Businesses and How to Avoid Them

Human Resources (HR) is there to make sure that your company does not get into legal trouble, but there are a few obstacles that may stand in their way.

HR is there to help businesses keep out of trouble. They are the Hall Monitors of the business world, only instead of telling kids not to run in the hallway, they give managers and employees rules of behavior to avoid the business being liable for injury. So, actually, the not running in the hallway thing probably still applies somewhere in the fine print! The fact is, it only takes one misstep for an employee or third party to sue a business. So here are the top HR risks for businesses and how to avoid them–something that every business owner needs to know.

Top HR Risks for Businesses and How to Avoid Them

  1. Company Managers
    • These are employees who are promoted for technical and functional capabilities. They may be inexperienced, which could lead to frustration from those they manage, or they could be very experienced and less willing to just follow the traditional way of doing things, which might cause friction with higher-ups.
    • Many managers are thrown into the position without any proper training, which could lead to HR trouble.
    – It’s recommended that you train your early managers on the basics and continue to invest in developing your veteran managers.
  2. Poor or Inconsistent Selection Process
    • Inconsistency in hiring creates a stew of risks in the workplace.
    • Untrained interviewers may not use the hiring application during the proper point in the process, or at all.
    – It’s recommended that you establish a consistent hiring process.
  3. Inconsistent Compensation Practices
    • Equal Pay Act requires equal pay for similar positions, no matter the sex or gender of the person–it’s 2016, people.
    • Compensation guidelines help establish an internal and external amount for each position, making sure that fairness and cost management stay on the side of good.
    – Tie compensation to competitive market rates to create consistency and objectivity to things like salary.

We’re experts on small business insurance in MA and can help you put the proper policies in place–including workers’ compensation. To learn more about getting competitive coverage for your small business clients, contact us today.