Small businesses and startups can often make human resource mistakes that hurt profits and keep them from growing.

In many instances when people start smaller businesses and startups and when they start to grow, they don’t give thought to things that will affect them in the long-term,”

Here are some tips to help avoid these mistakes.

Don’t Delay Hiring Good Talent: Small business owners and startup founders often go about the hiring process the wrong way. They may interview one candidate on Tuesday, the next on Wednesday and a third on Friday. Then they may wait until the following week to review resumes and even longer to make a hiring decision.

Smaller businesses and startups need to be fast and outmaneuver sometimes slower, bigger companies when it comes to hiring. The best candidates may be weighing other job offers. Instead of dragging out the hiring process, small businesses and startups should accelerate the hiring process. 

Evaluate Employees: Many small companies hire and fire talent based on “gut feelings” and then can live to regret the decision. Employees discharged on a whim can sue for being fired without just cause or file a claim of discrimination if they are in a protected class.

Employment-related lawsuits can be costly, and small business owners and startup founders can do themselves a favor by crafting a list of job expectations for employees and putting a job performance evaluation plan in place. Small business owners and startup founders can draft such documents themselves and or bring in outsourced HR such as cavnessHR or other HR professionals. Your lawyer can also help with this.

You should have consistent performance reviews. Documentation is important, too. Some small employers tend to think that if they do not document an employee relations situation, liability will be reduced as there will be nothing for the employee to use against them.

Actually it is quite the opposite. Documentation of employee relations situations allows the employer to prove that proper action was taken, the involved employees were informed of the need to correct the behaviors, and warning of the potential for additional disciplinary action up to termination was provided.”

Get an Employee Handbook:  This is very important to you as a small business owner or a startup founder

Onboard Employees Immediately: Small businesses and startups waste time and lose business opportunities by not prepping employees before the first day of work. You should automate collecting paperwork to ensure that new hires complete and hand in all needed documents.

Give Feedback The best feedback is just verbal feedback. Small business owners and startup founders should also set performance goals and award employees who meet them.

Ditch the Paper: Many small companies and startups rely on homegrown, paper-based systems to track time and attendance, manage schedules, and process key HR-related functions such as hiring and onboarding. You should use technology-based solutions for these tasks so they can focus on growing their core business.

Be aware and keep up to date  of all Laws and Regulations: Federal, state and local government regulations, laws and reporting requirements change constantly.

Misclassifying employees: Some small business owners and startup founders often misclassify employees as independent contractors to avoid having to cover them under Workers’ Compensation Insurance and pay payroll taxes. If employees are misclassified, then small businesses and startups could end up having to pay back payroll taxes and benefit costs on top of fines and penalties.