FLORIDA SMALL BUSINESS DEVELOPMENT CENTER AT IRSC
GROWING? HIRING? AVOID THESE 4
COMMON SMALL BUSINESS MISTAKES
TCBusiness.com 45
Think your business is too small for “HR”
processes? Think again.
It’s understandable that your growing
small business is sharply focused on accelerating
sales, managing cash flow and, of
course, serving your customers. But with
growth comes the need to hire, and with
that comes the burden of complying with
complex federal, state and local employment
laws.
Growing small business owners often
put off putting in place the processes and
systems for compliance, because, well,
there are fires to put out every hour, it
seems. But even small businesses with a
just a few employees should select someone
on the team to begin putting systems
and processes in place for hiring and training
(and firing), even if it isn’t the person’s
full-time responsibilities.
Procedures, processes and structure are
all key components to continued successful
growth, said Katherine Culhane,
associate director of the Florida SBDC at
IRSC, specializing in TEAM Building. What
company policies do they have in place
to properly manage their people? Companies
will not be able to grow if the CEO
is running everything. CEOs need to start
delegating and putting systems in place,
she said.
“When employees do not have a clearing
understanding of company policies
and how they are expected to perform in
representing the organization, it is very
difficult to management, motivate and
direct employees,” said Culhane.
Begin by developing, writing and
distributing an employee handbook, she
said. Have a procedure for terminating an
employee, including how to manage the
discussions with the employee and document
the misconduct. Culhane recommends
growth-stage small businesses
create detailed job descriptions, which
will help the management team better
performance-manage their employees.
“When employees have a clear understanding
of their roles and responsibilities,
it will reduce confusion and lead to better
employee performance,” she said.
Here are four common mistakes small
businesses make as they grow and one tip.
Let’s go!
MISTAKE NO. 1: HAVING A
CASUAL PROTOCOL FOR HIRING
The first few hires for many startups and
small businesses are people they know. Either
family, or friends, or friends of friends.
They are a relatively known quantity. It’s
all informal and word of mouth, said Eva
Del Rio, an HR consultant, columnist and
creator of HR Box.
“But at some point, you have to begin
hiring strangers. But by then, the company
has already developed poor hiring habits
— make it up as we go along, no formal
application, no references, not casting
of a wide net of applicants, no clear job
description/responsibilities,” said Del Rio.
“This can be detrimental because you are
bringing people into the company without
fully vetting them and they may or may
not be what you need. They have different
expectations than friends and families,
they are (likely) less loyal, and they won’t
be as forgiving about payroll mistakes, or
fudging of pay laws.”
A casual protocol for hiring can also
lead to unintentional discrimination, said
Patricia Milian, senior VP of ComplyRight,
in her presentation at the Small Business
Leadership Conference produced by the
Jim Moran Institute for Global Entrepreneurship
and Florida SBDC held in Orlando
this past June.
This can happen when hiring decisions
are made from the gut, there are no written
job descriptions, no training provided to
interviewers and the interviewing questions
are inconsistent from candidate to
candidate, which also may include personal
questions. Small talk during the interview
is a no-no. Questions like “When did you
graduate high school?” and “So you have
kids?” can get your business in legal trouble.
The solution, Milian said, is straightforward:
Formalize the hiring process, train
the interviewers and don’t let inexperienced
managers interview alone.
MISTAKE NO. 2: KEEPING EMPLOYEES
WHO UNDERPERFORM.
Many small businesses put off dealing
with problem employees, but few things
can bring down a small family-like team
faster.
“Most business owners struggle with
emotional ties to employees and fail to
deal with those employees who are not
performing. Failing to confront and deal
with non-performers has a negative effect
on those employees who are performing
and doing their jobs,” said Culhane. Maybe
the under-performing employee has been
with the company a long time and the
business owner wants to reward that loyalty
with a second, third or fourth chance.
Be careful.
Keeping on a problem employee actually
costs money, said Milian. It’s a quadruple
whammy: lost productivity due to
mistakes, it takes down morale, which may
spur valued employees to leave, there’s
the potential loss of customers, and of
course there’s the legal risk.
The way to resolve the issue of an
under-performer: document, document,
document. Every incident, complaint or
issue, every time, said Milian. Use progressive
discipline procedures, which includes
a verbal warning, then a written warning,
then a final warning, before termination.
Be sure to update employee policies as
BY NANCY DAHLBERG
Katherine Culhane, Associate Director
for the Florida SBDC at IRSC, consults
with businesses to help achieve their full
potential. Her background includes a long
career in banking that comprises roles in
management, business development, commercial
lending and private banking. She
has a Master’s of Science in Organizational
Learning and Leadership and is a Certified
Professional Behavioral Analyst with DISC-
Style Insights as well as a SHRM Senior
Certified Professional with the Society of
Human Resources.
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