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Understanding Human Resources Issues When Hiring Employees for Your Business

  • If you’re planning to bring on employees at your company, you need to have a grasp of human resources issues
  • Get a firm grasp of employment laws and requirements
  • Advance preparations allow you to develop a staffing plan, determine wages, and more

When starting or managing your own business, human resources issues are often put on the back burner. Entrepreneurs often start their companies as solo ventures, performing multiple roles, and don’t worry about the process of onboarding employees until they’ve grown to the point where they need help.

If you’ve reached that point, it’s crucial that you understand proper HR procedures. Failure to do so makes it more difficult to retain workers, and can even result in fines against your company.

Plan ahead

Even if you aren’t ready to grow your business in the near future, it helps to set up a plan for what you’ll need when you expand. This includes creating a staffing plan for what roles you’ll need, how many full-time or part-time workers will be necessary, and what you can offer in pay and benefits.

You’ll also want to plan what company policies and rules you’ll outline in an employee handbook, decide how you’ll recruit workers, and understand how you’ll manage payroll services. Consider how you’ll address HR issues down the road, such as employee leave and performance issues.

Know your obligations

Find out which federal, state, and local payroll taxes apply to your company. Failure to collect them can result in substantial fines, and it can also be a major financial burden to your business if you wait to pay these taxes instead of setting them aside through the year.

You’ll need to keep records on your employees, including information on medical insurance; a personnel file with documents such as the employee’s resume, application, and any disciplinary actions; a payroll file with tax and compensation information; and a record of injury reports and workers’ compensation claims.

Any records should be stored securely, since they contain sensitive information such as Social Security numbers. At a minimum, they should be kept in a locked file cabinet. You might also set up a Human Resource Information System.

Be aware of any employment laws applying to your company. These cover worker compensation, safety requirements, sexual harassment training, and numerous other topics.

Find out more about Connecticut taxes here, and Connecticut employment laws here.

Make yourself competitive

Determine fair salary for the responsibilities of the job you’re looking to fill. While your natural inclination may be to save money on payroll, dissatisfaction over compensation is a key motivator causing workers to seek opportunities elsewhere. This, in turn, can lead to extra costs and lost time spent recruiting and training a new employee.

A competitive benefits package can also be a good strategy in attracting and retaining workers. For example, employees have been increasingly drawn to companies that offer private plans for paid family and medical leave.

Consider hiring an HR professional

Bringing on a human resources specialist is an easy way to address the issues involved in hiring employees. Smaller companies can often make do with a consultant who can provide assistance as needed, but a full-time HR employee makes sense once your company grows larger.

Having a person dedicated to HR matters can also be helpful for addressing any employee problems or shortcomings. Small businesses can function like tight-knit families, making it more difficult for entrepreneurs to confront their employees on these issues; an HR professional is better capable of handling such matters.

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