Member Article

Five HR mistakes small and medium enterprises make

Because of a relatively small number of personnel, and often a lack of a full-time Human Resources function, many small and medium-sized enterprises (SMEs) can sometimes make mistakes with their HR related decisions. At AAT (Association of Accounting Technicians) we work with a large number of SMEs. Here are the top five Human Resources mistakes they need to avoid.

• Not who you know but what you know – While your close friend makes a great drinking buddy and confidante, they may not be the right person to make your company a long-term success. A previous personal relationship with someone can make it more difficult to work with them objectively. So, make sure every person you hire is actually the best person for the job, rather than someone you are giving the role to for the wrong reasons.

• Not having a clear outline of what you need and want – The first step in recruitment is knowing that you need help. However, you have to be specific with your requirements. Have a job description and know what knowledge, skills and abilities are needed to fulfil the role. Always match every candidate to that job description to decide if they are potentially a good employee in all of the ways your business needs.

• Not doing reference checks – References are not a box ticking exercise. They are a crucial indicator as to how your prospective employee will work for you. The initial search and selection process largely depends on responses from candidates, but reference checks will show you the bigger picture and the context in which their experience has been gained. Skipping them could put you and your businesses at risk.

• Not getting and keeping documentation – Paper work is the bane of any small or medium-sized organisation, taking time to process and complete properly. However, some HR paperwork, such as proof of right to work in the UK, or a contract of employment, is required by law. It is imperative that you check your employees and contractors comply with this and other necessary legislation, as failure to do so could lead to hefty fines that could have a major financial impact on micro and small businesses.

• Not rewarding your employees – It can be easy, when your focus is on market growth, to expect a lot from your employees. However, try to balance high expectations out with rewards and recognition too, that way your employees are more likely to feel valued and will thus stay with you for longer. Recognition doesn’t have to cost anything but can go a long way to getting good will and loyalty from your employees.

Olivia Hill is Head of Human Resources at AAT, an accounting and finance qualifications and membership body.

This was posted in Bdaily's Members' News section by Olivia Hill .