Small business owners juggle many tasks. Drop the ball and it can turn into a disaster—especially when dealing with HR. Over the next three weeks, we’ll break down the six most common human resource mistakes and how to avoid them. (Pro tip: most are preventable!)
Hiring the wrong person is expensive and affects employee morale. If you’ve ever hired the wrong person, you’re not alone. According to a CareerBuilder survey, 75 percent of employers said they’ve made the same mistake.
Avoid turnover by sticking to a clear, consistent process. This means posting an accurate job description (including qualifications, job duties, etc) and involving the team in the hiring process. It’s important you hire a qualified candidate who fits your company culture.
The IRS is strict with how businesses classify employees, and the mistake can cost thousands in penalties.
To determine an employee’s classification, look at their job duties. Below are some bullet points that can be a good place to start. Visit dol.gov/whd for further assistance.
- Independent Contractors
- No tax withholding
- Typically also work for other entities
- Provide their own equipment
- Set their own hours
- Not directed on a daily basis by the company
- Numerous other factors
- Overtime-Exempt Employees:
- Tax withholding
- Must meet specific overtime exemption requirements
- Salary wage
- No overtime pay required
- Pay can be reduced only under certain circumstances
- Nonexempt Employees
- Tax withholding
- Hourly wage
- Overtime pay
- Paid for actual time worked
- Hours must be accurately tracked
Inspiration for this post comes from “HR Keys to Business Success” by Melisa Morrison published in the December 2022 issue of Creative Retailer. Morrison has over 30 years of experience in Human Resources and is a former quilt shop owner. Stay tuned next week for more on employee training and the company handbook.
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If you still can’t get enough, register for the Creative Retailer LIVE Spring 2023 event May 2-4 in Pawhuska, Oklahoma for opportunities to learn from peers as well as network with industry professionals.