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Common pitfalls when a small business brings on employees

On Behalf of | Nov 5, 2023 | Business Disputes

As your small business expands, bringing new team members on board may prove to be crucial to achieving your business goals.

However, navigating the path of small business employment can be challenging. There are several pitfalls that small businesses may encounter when hiring employees, which you should know about and strive to avoid accordingly.

Hiring the wrong fit

One the most frequent mistakes that small business owners make is rushing the hiring process. When you’re short-staffed or dealing with a sudden increase in workload, a temptation to hire the first candidate that comes along can be strong. However, hiring in haste often leads to long-term regrets. It’s essential to resist the urge to fill a position just for the sake of mitigating the challenges of having a vacancy.

Hiring someone who doesn’t align with your company’s culture can also be disastrous. To avoid this, clearly defining your company’s culture and values is crucial. During the interview process, assess candidates for their skills and experience and their compatibility with your culture.

Misclassifying workers

Another common pitfall involves misclassifying workers as independent contractors when they are rightfully employees. Misclassification can lead to legal trouble, including potential fines and back taxes. Properly classifying employees as exempt or non-exempt under the Fair Labor Standards Act is also vital. Misclassifying employees in this regard can result in unpaid overtime claims. Ensure that you’re familiar with the FLSA and its criteria for exemption status.

Inadequate employee onboarding

Failing to provide a comprehensive orientation for new employees can leave them feeling adrift. A proper onboarding process helps ensure that your new hires know the following:

  • Their responsibilities
  • The company’s policies
  • How their role contributes to the organization’s success

Moreover, small businesses can struggle to provide ongoing training and development opportunities. Neglecting these concerns can hinder employee growth and engagement.

As your small business takes the significant step of bringing on employees, it can help to be aware of the common pitfalls that can hinder your success. By avoiding these missteps, you can more effectively create a positive and productive work environment that contributes to your business’s growth, instead of adding to its potential liabilities.