The Reality of Poor HR Practices

Human Resource practices are critical to any organization – there is no substitute for good HR. It doesn’t matter whether you’re in retail, the service industry, manufacturing, construction, or a First Nation –  it doesn’t matter if you have 3 employees or 3,000 employees. The true cost of poor HR practices is overlooked by most organizations and often times proper HR processes are only implemented after an HR “problem” arises. It’s only when an organization feels some sort of financial and/or organizational “pain” do they support changes to their HR structure.

Healthy organizations, small, medium or large, don’t wait for things to go wrong. They’re proactive and adopt good HR practices early on. This saves them from financial and/or organizational “pain” and creates healthy environments and strong organizations.

So, what are poor HR practices? The following will give you an idea.

Hiring

No organization wants to hire the wrong person for a job. Not only because they’ll need to find a replacement candidate sooner than they’d like but also because making a bad hire drains energy and time and can “cost” a business.

When you hire the wrong person, you’ll likely find yourself looking for ways to reassign the employee or working tirelessly to fit them into the organization in some way. Rather than simply letting the employee go, you’ll spend time and money on training and ongoing performance reviews.

Either way, they’re a drain on your resources. Here’s how.

Productivity Costs

While you and your managers are spending time trying to train and retrain the new hire or manage personality conflicts between the new hire and existing staff, the organization will suffer.

All that time spent on the new hire will drain productivity – for your staff and the time spent by your managers with the bad hire – approximately 1 day a week – managing their poor performance.

Financial Costs

You’re not only paying a wage to someone who may not be performing to your expectations, but you might also be paying for additional training. And if you end up having to let the employee go, you may be responsible for severance pay and legal fees, not to mention the costs to conduct another employee search and hire a replacement. A bad hire can cost you upwards of 30% of the employee’s potential first year earnings.

Employee Morale Costs

As you’re spending your time and money trying to correct your mistake of hiring the wrong person, the rest of your team may become dissatisfied or disengaged. It’s difficult to stay upbeat when one team member requires so much attention and brings the whole team down. In many cases, bad hires do not get along with other employees, which can cause additional problems for the cohesiveness of your team.

Reputation Costs

In today’s world of transparency, job seekers are connected to information 24/7 and can easily find out what is and isn’t working in your organization — based on reviews from employees and customers/clients themselves. If you have a bad hire on staff, you should monitor your on-line reputation closely to make sure this individual isn’t causing your organization any additional grief.

The next time you need to recruit, take your time and ensure you’re getting the right person. Check out what others are saying about your organization on-line, and be honest with your potential hire about what your organization needs to work on during the interview process. Also make sure you’re managing expectations up front so that your hires don’t have any buyer’s remorse when they begin working for you. Give us a call – we’d love to help you recruit your next star employee!

Legal Compliance

Employment related lawsuits are on the rise and are expected to continue. Consider the fact that an employee will win a lawsuit more than 2/3 of the time. Also consider that the average employment related award normally well exceeds $20,000 and the cost for legal fees can easily approach $5,000 and can reach upwards of $20,000. Even the most frivolous of lawsuits can cost you thousands of dollars.

The financial impact from employment related lawsuits can have a serious impact on your organization. With the increasing number of changes to HR legislation it can be very easy to find yourself in violation of new laws, through lack of knowledge and/or understanding of the complex HR compliance requirements. This can leave your organization open to penalties, lawsuits and even dissolution. As an employer you are expected to know and comply with all HR laws. The lack of understanding or knowledge of HR laws does not excuse an organization from their obligations and cannot be used as a legal defence.

Pebbles & Twiggs will provide you with 17 + years of HR experience – we’ll quickly assess your compliance – giving you the confidence and peace of mind that your organization is protected.  We’re only a phone call, email or text away. We’ll immediately answer your questions – allowing you to address issues before they escalate.

Employee Discipline and Termination

In order to minimize your organizations liability and financial costs you need to have good discipline and termination policies and processes in place prior to needing them! Before you get to the point of having to validate a termination legally or wanting to let an employee go, your paperwork needs to be in order – this includes having completed documentation (performance evaluations, disciplinary action forms, attendance sheets, etc.) that support a valid reason for termination. These documents will serve to back up your decision should the dismissed employee file a lawsuit – often these documents can mean the difference between a simple parting of ways with minimal costs or a prolonged, expensive, and messy legal battle.

Some helpful tips:

• Write down everything – documentation is key.

• Communicate your performance expectations clearly from the very beginning – this includes job responsibilities, roles and goals. Never assume your employee knows this information – it is essential that you communicate it verbally and in a written document.

• Conduct regular (quarterly) performance meetings – the meetings are meant to review the most recent work undertaken and also plan and discuss goals for the upcoming quarter.  The annual meeting is about wrapping up and planning for the upcoming year – there should be no surprises during this conversation.

There are right ways and wrong ways to carry out performance management and terminations. How you handle a termination and what policies and processes are in place will make a difference in your legal risk.

The true cost of poor HR practices is often overlooked by organizations — that is until they run into a problem. If not managed properly your HR issues can dramatically impact your workplace environment, your staff, your finances and your community. We know it’s tough managing your staff and your organization… but it doesn’t have to be. We’d love to help you with your HR – we’ll be there when you need us most, on the phone, via email, text or in person!

We’d love to help you out!