Top 5 HR Mistakes That Cost Your Business and How to Avoid Them
Running a business is tough.
HR mistakes can silently drain resources, reduce productivity, and expose you to legal risks.
Here are the top five HR mistakes that can hurt your business—and how to avoid them.
1. Misclassifying Employees
The Mistake: Misclassifying employees as exempt or independent contractors can lead to wage and hour lawsuits. Read Jan 2024 Changes Here.
Avoid It: Conduct a job classification audit to ensure compliance with labor laws - and remember, this is done on the federal and state standard based on the industry and job type.
2. Outdated Employee Handbooks
The Mistake: Handbooks don’t age well. Using an outdated handbook with old policies that don’t reflect current laws or your company’s culture create risk, it allows employees to assume you are out of compliance because you haven’t kept up with the basics. Read July 2024 Overtime calculation changes here.
Avoid It: Regularly update your handbook (consider using our customizable, maintained handbook service to stay compliant year-round).
3. Letting Business Relationships Run on Autopilot
The Mistake: Assuming your payroll company is handling everything perfectly or allowing passive benefits enrollments can lead to serious compliance issues and missed savings opportunities. In 2019 California Supreme Court Holds Employees Cannot Sue Their Employers’ Payroll Companies for Wage Claims Goonewardene v. ADP, LLC.
Avoid It: Audit your payroll regularly to ensure it's compliant with laws and shop for benefits insurance that offers both options and savings. The "this is how we've always done it" mindset is no longer sustainable—HR is now a strategic game, not the personnel department of the 1950s.
4. Ignoring Workplace Conflict
The Mistake: Letting conflicts fester without intervention can create a toxic culture and lower productivity. Former UPS Driver Wins $238 Million Verdict in Suit Over Firing in Washington Gratton v. United Parcel Service Inc., E.D. Wash., 22-cv-3149, 9/12/24
Avoid It: Do your workplace investigations. Foster a transparent conflict resolution process, and provide manager training to handle issues early.
5. Not Staying on Top of Compliance
The Mistake: Missing deadlines for employment law compliance updates (like wage changes or new leave laws) can result in costly penalties.
Avoid It: Schedule regular HR audits to catch compliance issues before they become legal problems.
Need Help Avoiding HR Mistakes?
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