HR Mistakes that SME’s Make and how to Avoid Them
Small businesses can often make human resource blunders that hurt profits and keep them from growing, which is crucial because statistics show that only half of startups will survive long enough to celebrate their fifth anniversary. This can be attributed to a lack of proper planning and poor policymaking in the running of the organization.
Effective hiring helps a business to be stimulated in the organization in order to give it an upper hand in achieving a high turnover and reap a lot in profits. The following are some of the mistakes that SME’s make especially when it comes to hiring and how they can be mitigated:
- Lack of proper talent to steer the organization
Some owners of SMEs, instead of doing external searches to find quality candidates, end up hiring only acquaintances or associates for their vacancies. Maybe it’s because you do not have the financial resources and this makes you choose not to do data verification or confirm the references of the candidate to verify the veracity of the information included in his resume, or maybe you simply feel bad for the person and would like to help him get a job. Either way, hiring the wrong candidate can be expensive. Not only will this person not be properly qualified for your position, but you will also have to replace him/her in the future, which is an additional cost to your human resources expenses.
- Unclear job descriptions.
When you create a vacancy for a position, you also have to create a job description. However, owners of SMEs forget to create descriptions that are clear and truthful. This step is important to ensure you attract the best talent in your company. Your job description should include the skills, experience, and education that the ideal candidate should possess, and you should proceed to the interview process only with those candidates who meet these requirements. This helps you even in sieving the right talent for a particular post.
- Lack of documentation of problems.
If you have employees whose performance is showing problems, do not ignore them waiting for these problems to disappear on their own. You must implement performance evaluations with correction plans so that your employees know which areas they should improve. In the same way, make sure to deal with the problems that appear immediately. If you document all these problems in writing, you are also collecting information that will be useful in case of dismissal due to poor performance. This will help in performance audits and make an imperative choice in who is to be sustained in the company.
- Lack of motivation and recognition of work well done.
It is disheartening for an employee where they go out of their way to perform excellent work, only for them to get feedback of what they had done. It gets worse even when exemplary employees are not identified and rewarded. It is important for SMEs to set up systems that recognize individual achievement and rewards it proportionately.