5 Costly HR Mistakes

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These common HR mistakes have very costly consequences for many businesses. Find out the symptoms of these mistakes and their warning signs and how to avoid them.

1. The one-person HR department.

Symptoms: HR functions are managed by individuals with no HR experience such as an Operations Manager, Office Manager, or a Controller. HR responsibilities are delegated to line managers.

Results: When the HR function is managed by individuals with other responsibilities, or those that haven’t been properly trained in HR, important tasks tend to fall through the cracks – like meeting compliance deadlines and keeping up with changing legal requirements and trends. The basics may be accomplished, but more strategic issues are overlooked.

Solutions: Training anyone involved in an HR function or responsibility on the basics of HR, outsourcing HR projects (i.e. compensation, benefits analysis, performance management process overhaul, training and development), and using experienced consultants to help with strategic issues are ways to support the one-person HR department.

2. Losing control of hiring and recruiting.

Symptoms: Your organization receives an unmanageable number of resumes, has hiring managers that ask their own interview questions or use biases to make selection decisions, is frequently rushed to hire anyone to fill a position – which oftentimes is not the best hire, or lacks a consistent method of selection (different candidates are evaluated on different criteria). Or, your hiring process may be so lengthy and inefficient and require so many individuals’ involvement, that candidates lose interest and patience.

Results: Your organization experiences new-hire turnover, turned down job offers, vacant positions, lost productivity, and low hiring manager and new-hire satisfaction. You may experience difficulty managing applications and resumes and overlook potential top talent. You put your organization at legal risk because selection is not based on objective and consistent criteria. You rush the process and end up with a poor hire which affects your bottom line and that you inevitably terminate.

Solutions: Investing in an applicant tracking system, training hiring managers in the basics of interviewing and selection, and developing standard hiring policies and processes are all ways to make your hiring process more efficient, consistent, and productive. Also, establish reasonable timelines for the hiring process and only include those that need to be involved. Lastly, make sure that you believe the person you are hiring is the best candidate for the job and will be a top performer. Don’t just hire to fill a spot – it is far more costly in the long run.

3. Not reviewing performance.

Symptoms: In light of not providing pay increases the past few years, your organization may have skipped its annual performance review. Or, your performance review process may be lackadaisical – reviews aren’t completed on time and supervisors don’t take them seriously. Your organization may not even have a formal method of reviewing performance.

Results: In turn, either a portion of your workforce or many of your employees don’t receive feedback about their progress, leading to disengagement and less productivity. Documentation about performance is lacking, so when you need to terminate someone, you’re at a loss. Measurement of performance may be questionable, especially if supervisors don’t take the process seriously, and this could affect other programs like variable pay. Employees are dissatisfied with how their performance is measured and consider the tool invalid.

Solutions: Reviewing performance annually (at a minimum) is important. Develop either a standard review form or goal setting process, and consider employees’ feedback in the development of the system for buy-in. Additionally, train your supervisors in performance management (especially conducting a performance review) and hold them accountable for performance management duties in their own reviews. Make the performance management process mandatory, but not cumbersome (i.e. too many reviews to do at once, too lengthy form, etc.).

4. Failing to know your competitors.

Symptoms: Your organization doesn’t invest any time in learning about or benchmarking other organizations’ pay, benefits, or workplace practices. It doesn’t track HR data or metrics. It doesn’t know who its competitors are in terms of talent.

Results: Job candidates turn down offers or provide direct feedback that pay or benefits are below that of other organizations. Voluntary turnover of employees is prevalent in certain pockets of your workforce or throughout the organization. You receive consistent complaints about pay, benefits, and development opportunities.

Solutions: Identify the organizations in which you compete for similar types of talent and define their industry, size, and location. Select a few sources of data that are most relevant to these organizations. Compare your internal data with the information in these sources. Use the data to make adjustments to your pay, benefits, and workplace practices.

5. Not protecting your business.

Symptoms: Your employee handbook hasn’t been updated in a few years. Compliance changes have been neglected, as have risk management and disaster recovery plans. You haven’t created succession, development, and staffing plans to assure that you have the right talent in place to meet short and long term business objectives. You don’t look at demographic trends that will impact your business – like retirements or family needs.

Results: Your organization finds that it can’t make termination or disciplinary decisions without legal risk because it lacks certain policies. You realize that you don’t have the right skills or competencies to meet your organizational objectives. One of your key leaders leaves and you don’t have anyone prepared to fill the missing role. An employee goes out on FMLA and no one has been cross-trained to fill their shoes.

Solutions: Create succession plans for key roles and create plans (with timelines) to develop individuals in your organization to take on these roles, such as leadership development training or preparation. Conduct an annual “skills inventory” each year of your employees and compare the results to your strategic objectives. Do you have the skills you need? For what skills do you need to develop or hire? Do you have back-ups cross-trained? Coordinate training and staffing plans with this inventory. Finally, update your employee handbook at least annually (and always after a change in employment law) and obtain an outsider’s perspective – such as a consultant or legal counsel. These individuals will be able to notice gaps or deficiencies in your policies and make recommendations to protect your business.

Additional Resources

HR Consulting & Project Support
ERC is a leading provider of quality, affordable HR consulting and project support services in Ohio. Our HR consulting services provide the crucial strategic and technical expertise needed to support your HR goals and workplace initiatives. Contact consulting@yourerc.com for more information.

Compensation & Benefits Surveys
ERC publishes many compensation and benefits surveys to help Northeast Ohio employers benchmark their pay and benefits practices.Our ERC Salary Survey, Wage Survey, and Executive Compensation Survey provide local pay information for over 300 positions.

Some HR Management Jobs See Salary Increases

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The results of the 2011 ERC Salary Survey show the rising of some HR management salaries – mainly those specializing in a certain aspect of HR such as compensation, training, and recruiting.

According to the survey, the median salary for a Compensation/Benefits Manager rose 32% from 2009 and 12% from 2010. Additionally, the median salary for a Training Manager increased 24% from 2009 and 3% from 2010. Recruiting Managers also experienced a modest increase of nearly 7% from 2009.

The survey, however, shows that salaries for HR Managers continue to remain flat. The median salary for HR Managers showed no significant change from 2009 or 2010, remaining around $65,013.

Median HR Management Salaries

Additional Resources

More info about ERC Salary Surveys: click here
Other compensation surveys: click here

6 Ways to Manage New ADA & Legal Changes

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The final 2011 ADA regulations had important implications for HR and managers when managing employees’ medical conditions and impairments. Here are six ways we gave to strategically manage this issue in particular and other legal changes that may affect your business in the future.

Meet with your HR and management team. When any new employment law or regulation is implemented, as a strategic measure, it’s important for your HR team and organization to determine how this law will impact your organizational objectives. Meet with your management and HR teams to discuss how the law or regulation will influence your HR operations, affect your ability to attract and retain key talent, and prompt new liabilities or risks that could affect your bottom line or operations. From there, you’ll need to determine what tactical issues need to be addressed, such as implementing training to your management staff, revising and communicating policies, adjusting HR processes, and incorporating new risk management processes.

Revise policies. In the case of the final regulations pertaining to ADA (as well as other laws and regulations), it’s important that you review your policies and employee handbook to ensure that language is adjusted to meet the changing definition of disability and is consistent with the language within the regulation. Remember, the definition of disability has become much broader, so your policies should reflect this change.

Review and adjust accommodation process. No longer is focusing on the question of whether an illness or condition is a disability the focus of the ADA law, as many conditions will now fall under this definition. Rather, the changes to ADA emphasize developing accommodations for employees with impairment. Key questions you should ask are how is your accommodation process administered? Is an HR representative in charge of this process or are line managers? With the new regulations, it’s recommended that HR:

  • Lead and manage the accommodation process consistently throughout the organization versus managers. This ensures that the process is run the same throughout the organization, reducing potential liabilities.
  • Approach the ADA process like FMLA and use standard forms and processes instead of un-standardized doctors’ notes and evaluations. Consider your approaches during the pre-employment process with applicants as well as when current employees develop an illness or condition while they are employed.
  • Create a standard internal form for employees to use which provides a checklist of possible conditions or ability to write the condition or impairment and summarizes alternative accommodations that apply to the condition, or a guide for a discussion of these accommodations. The form may also include a doctor’s signature if necessary versus using doctor’s notes.

Review job descriptions. Ensure that job descriptions specify the essential job functions of each job – and also be sure that these essential functions are actually essential. The courts have been critical of how essential functions are defined. Also, be cautious of defining too many tasks as essential. A good rule of thumb is using a job analysis to rate or rank how important and critical certain tasks are to a job and how frequently they are conducted, and to account for job incumbent and supervisory perspectives.

Train and communicate. When a policy or process is revised, be sure to communicate the changes as soon as possible to managers who are in charge of implementing and executing them. With ADA, front-line managers will likely be the first to know about an employee’s illness or condition and need to understand how to handle requests for accommodations such as:

  • Job modifications
  • Schedule changes
  • Environmental issues (temperature, work setting, stress, exertion, etc.)
  • Motor or cognitive impairments
  • Mental issues (depression, anxiety, etc.)

Managers need to know how to respond, act, and when to refer to HR – and how negative or inappropriate reactions to these requests or even knowledge of a medical condition can cause liability or risk to the organization. They also need to be trained on how to effectively manage employees with mental or physical impairments in terms of scheduling, direction, support, and even modification of interpersonal interactions.

Last but not least, stay ahead of the curve. In HR, we unfortunately tend to react to a problem, a new law or regulation, or a new fad (i.e. what every other employer is doing) versus staying ahead of trends and upcoming legal agendas and issues that will affect our business. This often results in poorly executed tactics, lawsuits, and other issues that could have been avoided had we been more strategic. By being proactive and staying on top of changes emerging in the market, we can help our business manage its risk, legal, and HR issues more effectively, and become a more strategic partner within our management team.

Please note that by providing you with research information that may be contained in this article, ERC is not providing a qualified legal opinion. As such, research information that ERC provides to its members should not be relied upon or considered a substitute for legal advice. The information that we provide is for general employer use and not necessarily for individual application. 

Additional Resources

ERC provides a number of resources to help you stay updated on important legal and HR trends and issues, as well as training for your managers on employment law and employee relations.

ERC Training
To visit our ERC Training Program and Courses page: click here.

Supervisor & Management Training
We offer several courses for supervisors and managers on topics like employment law, workplace bullying, and general employee relations topics like communication, interpersonal skills, and more. To learn more, click here.

HR Project Support
From employee handbook and policy updates to job description revisions, we offer assistance with HR projects to help your organization stay compliant. For more information, please contact consulting@yourerc.com.

 

Survey Shows Trends in Local Hiring Metrics

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The 2011 ERC Hiring & Selection Practices Survey shows several trends in hiring metrics such as time to fill, time to start, cost of hire, offer acceptance rates, and vacancy rates that help employers benchmark their hiring practices against other local organizations.

The survey’s results show that the average time to fill an open position is 52 days. Positions with the highest average time to fill were executive, engineering, and management positions, while positions with the lowest time to fill were production, maintenance, customer service, and administrative/clerical jobs.

Additionally, the 2011 survey reports that the average time to start is 14 days for employers. This timeframe was consistent across most employers. This reflects the average number of days between offer acceptance and the employee’s first day on the job. Lower vacancy rates were reported by employers of 11 days on average.

The 2011 survey’s results also indicate the average cost of hire for respondent, which is $2,233.