As an entrepreneur or small business owner, you are used to juggling multiple balls. From sales and fulfillment to answering the phones and cleaning up, you do it all. Even HR. But this is like juggling with fire. Much harder — and a lot more risky. How do you avoid getting burned when it comes to human resources?
HR: Understand the Risk
Human Resources is one of the most complex occupations; the skill set required is as diverse as it is specialized. These professionals need to be fluent in the psychological, emotional, technical, legal, compliance, and regulatory aspects of HR. They are adept at juggling too, and they have the expertise and experience to keep all the balls in the air.
The relationship between employer and employee is seen as imbalanced; the employer, many believe, are in the position of power. That perceived imbalance has created a legislative system that is full of checks and balances; everything, from minimum wage and work hours to health and safety, is highly regulated.
Provincially regulated employers in Ontario must adhere to the Employment Standards Act, Occupational Health and Safety Act, the Workplace Safety and Insurance Act (1997), the Pay Equity Act, and the Human Rights Code. Federally regulated employers in Ontario also have a mirrored list of Federal legislation they must comply with.
If that is not complex enough, legislation is continually changing. You can’t learn it once and call it a day. You need to stay up-to-date — or up-to-the-minute, as it often feels like. And that’s on top of all the other functions for which you are responsible in running your business.
When you handle HR on your own, or entrust the function to a generalist rather than a specialist, you leave your company exposed to legal issues and litigation.
How can you reduce the risk without making human resources your full-time job?
3 Tips to Mitigate Risk When Handling HR In Your Company
- Conduct an HR Audit
- Find an Employment Law Expert and Include Them in Your HR Discussion Early
- Invest in HR as Early as Possible
Handled by an HR consultant, these comprehensive audits look at everything: your policies, procedures, systems, and documentation. Do you have everything you need in place for effective human resources management?
Most small and medium businesses find that the answer is “No.” It is better to find out in an audit, however, than in a legal situation. You will be able to identify weak points so you can take steps to minimize liabilities and proactively manage risk.
Remember that HR encompasses both legal obligations and professional best practices. For example, there are not a lot of legal requirements regarding probationary periods for employees, but many HR professionals find them to be useful in managing employee performance. An audit helps you cover both fronts effectively.
Do not wait for a crisis. With counsel you trust, you can often resolve issues in a way that saves you from the consequences of making a move that triggers liabilities.
Even companies with HR departments benefit from retaining employment lawyers. Unlike HR professionals, lawyers have an edge because they understand the legal system from the inside. They know how to weigh, collect, and present evidence in a compelling way; they understand the mechanics of litigation and mediation; they are able to strategize effectively in a legal setting.
If you see a red flag, have a misgiving about an employee, or need a sounding board before making a human capital decision, call on your counsel. A simple 20-minute phone or email exchange can impact your bottom line significantly by helping you avoid legal action.
The earlier you invest in human resources, the more impact you will have on employee performance and workplace culture. With a strong HR function, you can also improve the effectiveness of operations and prevent potential legal problems.
It can be a hard sell: there are so many other areas demanding a piece of your budget. The return on investment from HR can be more difficult to see, at least initially. But it will pay off in the long-run.
As a business owner, you already have enough to do. Don’t add juggling with fire to your resume. Consult an employment lawyer to make sure you make the right decisions and mitigate your risk.