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Refreshing Insights

There are countless pressures on small and mid-sized organizations to manage operations, sales, production, customer service, marketing and various growth initiatives. When the added pressures of regulations, employee engagement, recruitment, recordkeeping and other HR functions come into play, it can feel overwhelming.

It can be difficult for small and mid-sized businesses (SMBs) to know all there is to know about HR. Avoiding the increasing demands for greater employee engagement, stricter compliance oversight, technology integration, finding skilled labor and more can lower employee retention, prevent growth and result in costly fines.

We’ve compiled the top seven areas where we most often see the need for establishing best practices, with some presenting major vulnerabilities that need to be addressed right away.

1. Compliance

When we meet with prospective clients who are considering outsourcing some of their HR functions, the number one concern that brought them to that place is compliance. Noncompliance can result in hefty fines, and most are shocked to discover the number of regulations their company is in violation of, and others they didn’t even know existed.

The myriad of regulations imposed on businesses is confusing and the rules can change overnight. And those rules will differ depending on your company’s size, employee count, industry, organizational structure and more. Even if a rule doesn’t apply today, it may in the future. Here are some of the major compliance issues we come across that often need to be addressed.

  • Family Medical Leave Act (FMLA) — In general, if your company has more than 50 employees, it’s FMLA-eligible and must have formal policies regarding personal, medical, short-term disability and other forms of leave. However, some public and private organizations still must comply regardless of the number of employees.
  • Americans with Disabilities Act (ADA) — Are you able to appropriately accommodate employees and patrons with disabilities?
  • Occupational Safety & Health Administration (OSHA) — There are basic safety protocols every business needs to follow, with additional industry-specific standards for everything from materials handling to noise exposure to walking surfaces and more.
  • Fair Labor Standards Act (FLSA) — Determine exemption status and ensure compliance with standards for minimum wage, underage workers, overtime, immigrant workers and more.

There are dozens of other regulations that may apply, depending on your industry and business size. Part of ensuring compliance is maintaining accurate records for specified lengths of time. An unannounced I9 audit or other investigation could reveal costly errors requiring back pay, fines or other corrective measures.

2. Hiring Practices

Are you aware that it’s illegal to ask a potential hire about their family members, religion, country of origin and other topics? Establishing a consistent interview process will not only help you find the best candidate and demonstrate your professionalism, it will also help ensure that you’re not violating any laws by asking the wrong questions.

3. Onboarding

Once you’ve found the right employee, make sure he or she is made aware of how you operate by providing scheduled and detailed training on technology, policies, safety requirements, ethical standards, benefits and more. Create a new hire checklist, and provide a detailed employee handbook to clearly communicate expectations and develop accountability.

4. Disciplinary Protocols

Establish practices for taking corrective action, including required documentation such as formal written warnings and potential consequences. Having it in writing helps ensure all are treated fairly. Also establish offboarding protocols, such as exit interviews, for individuals who quit or are fired. Determine processes for multiple layoffs or a reduction in the number of workers.

5. Employee Benefit Administration

When an employee is eligible to receive benefits, it’s important to enroll them on time and to maintain accurate records in a secure database. Establish open enrollment policies and coordinate and oversee COBRA, beneficiaries, rollovers, claims, benefits files and more.

6. Training/Education

Employees generally want to grow and learn and not become stagnant. Determine growth plans and identify benchmarks for career development. Establish a solid organizational chart, and help employees determine goals for their career paths so they can know how to get to the next level.

7. Have an HCM System

Each employee will have different information that needs to be kept secure, accurate and quickly accessible to authorized users, especially in the event of an audit. Keeping accurate records for a growing labor force is challenging without the right technology. While software such as Quickbooks may handle payroll, it does little to ensure compliance or keep the endless amount of data related to benefits, compensation, employee records and more organized and up to date.

Using a Human Capital Management system (HCM) is undeniably the best way to maintain accurate records and identify a company’s needs. This software can track everything from tax forms, signed agreements, I9 forms, OSHA logs and more. It also integrates the payroll function so your company doesn’t have to work with multiple platforms.

A challenge with HCM is that many systems are cost-prohibitive for SMBs. However, partnering with an HR service provider such as McClone will provide your company with robust HCM software in addition to HR experts who will partner with you and your team to address your HR challenges.

Identifying your company’s specific needs on your own can be difficult. We’ve developed a more in-depth HR Best Practices Checklist that can help – get your copy by clicking the link below. We’re sure you’ll still have plenty of questions about your unique situation, so don’t hesitate to reach out to us for a complimentary HR Gap Analysis to help identify your greatest areas of risk. We’re here to help.

HR Best Practice Checklist 

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A collection of articles from the McClone team with the helpful knowledge and insights to ensure your organization is well protected.