Human Resources: what does that actually mean to your business? Let’s break down this commonly-used term.
- Human: the people within your business, i.e. your employees or workforce.
- Resources: a supply or support source.
So “human resources”—a resource consisting of humans – means the people or employees that support your business. If these people are the support for your business, how well are they really supporting your business? Let’s take a look at the statistics:
- According to Glassdoor Data Labs, fewer than half (49 percent) of employees would recommend their employer to a friend.
- 87 percent of organizations cite culture and engagement as one of their top challenges, and 50 percent call the problem “very important,” according to Global Human Capital Trends 2015.
- While 90 percent of executives understand the importance of employee engagement, fewer than 50 percent understand how to address this issue. (Conference Board, cited by Deloitte University Press, January 2015)
- One in two employees has left a job to get away from their manager at some point in their career, according to State of the American Manager.
- It takes an average of 52 days to fill an open position, up from 48 days in 2011. (Talent Acquisition Factbook 2015, Bersin by Deloitte, April 2015)
- All statistics are the most current posted by Glassdoor.
These statistics clearly indicate that in the majority of companies, their “human resources” are not supporting the company at a level that would make the company the most effective, efficient and successful. If less than 50 percent of your workforce would recommend your company to a friend, it might be safe to say that they are engaged less than 50 percent of the time they are at your workplace, supporting your company. So how, as an executive, do you address this issue and get your employees engaged, supporting your business to protect it, and help it grow and thrive?
As a former HR executive, here are three best practices I lived by:
- Know Your People. Get the right people in the right seats.
- Reduce turnover: At Staff One HR, we actually have a tool to help determine a hard dollar amount for how turnover affects the bottom line of your business, since turnover is a huge liability for any company.
- Utilizing tools such as Predictive Index: Happy workers are more likely to be engaged, and thus a better resource, stronger support and a smaller liability.
2. Document, Document, Document. HR best practices and compliance are becoming increasingly more important.
- I-9: The new I-9 form became effective in January of 2017. Having the proper I-9 documentation on your employees removes a large financial liability for your company.
- Fines for I-9 violations are $216 to $2,156 per violation.
- COBRA/ACA and other compliance notices: Many companies and business owners do not understand when and how they are required to send these out. There are monetary fines associated with each of these notices and forms that, in the event of an audit, could financially affect your business.
- Employee Discipline/Documentation: I cannot stress this point enough. As much as you need our people, you must also protect yourself as a business owner. The less documentation you have when an employee has not followed policy, or a specific training, the less likely you are to win an unemployment claim, workers’ comp claim, or even a lawsuit. These things can be VERY costly to a business.
3. Protect yourself. Employment Practices Liability Insurance (EPLI) is a great place to start. This policy is very important and is a separate policy from your General Liability Insurance. These policies cover you in the event that an employee sues you for harassment, discrimination, a hostile work environment claim, and the like.
So how do you actually manage all these processes? A Professional Employer Organization, or PEO, can be a very effective way to minimize your risk and offers you, as the business owner, cost effective solutions in all of these areas.
For more information on the turnover calculator tool, Predictive Index or the new I-9 form, please contact the author directly at email@example.com.