The Top 5 Mistakes SMEs make with HR policies
When it comes to managing people it’s often only when things go wrong that the benefit of hindsight comes into play for SMEs.
Stephanie Maley, Chief People Officer at Factotum outlines why it’s important for SMEs to make sure their HR policies are up to date. Stephanie emphasises, “There are four areas UK legislation requires policies to be in place for all businesses, these are in relation to: Equal Opportunities; Health & Safety; Equality & Diversity; and Discipline/Dismissal and Grievance.”
Factotum reveals the top five mistakes SMEs make with their HR policies:
1. Not having clearly defined HR policies and procedures in place. When a business is running smoothly, owner managers rarely think about spending time on HR policies. However, once a business reaches more than 10 to 15 employees it is advisable to put in place policies to set out expectations for the employer and employee. If things go wrong, and there’s no policy in place, employees and owners can experience confusion and inconsistency in the way HR issues are handled.
2. Failing to regularly review and update HR policies. Laws and regulations are constantly changing, so it’s important for SMEs to stay current to ensure compliance and avoid legal issues. Stephanie advises business owners sign up to the ACAS update service to keep abreast of regular changes.
3. Not providing adequate training and support for managers and employees on the company’s HR policies and procedures. This can lead to misunderstandings and mistakes. For example, the first thing an Employment Tribunal chair will ask is whether an employer has followed their procedure. Even if a dismissal is potentially fair, an Employment Tribunal chair can find the dismissal to be unfair purely due to the employer not following their own policy or processes. This can result in financial penalties for the employer, as well as negative PR which can adversely impact their ability to attract future employees.
4. Not enforcing HR policies consistently and fairly. This can create a perception of favouritism and undermine trust and morale among employees. This can often be the case in family businesses, or when certain employees have been engaged in the business for a longer period. The main thing to remember as an employer is that all employees should be treated consistently and fairly, otherwise the employer could fall foul of a discrimination claim.
5. Not addressing HR issues and concerns in a timely manner. Ignoring or delaying addressing HR issues can lead to further problems and potential legal liability. Certain issues are time-bound, meaning that the legislation provides for an employer to deal with an issue differently after a certain amount of time has passed. For example, if an employer has a probationary period clause in their employment contract, it could potentially be fair to dismiss an employee with only one weeks’ notice. However, if the employer tries to do this even a day after the probationary period has ended, this would not necessarily be a fair dismissal. Outsourcing specialists like Factotum can review your existing procedures and work as your trusted advisor every step of the way. The earlier you address issues, generally the better the outcome. Issues which are left to fester tend to ultimately be more costly, both in time and money.
At Factotum, we will help you navigate the legislative landscape and support you to create and define the culture of your business.
