Five HR Mistakes by Small Businesses (And How to Fix Them)

Being a business owner requires entrepreneurs to get their hands dirty in every aspect of the business, including human resources, also known as people operations. Since setting this up correctly, in the beginning, requires expertise, I tapped into Jules Weeber, a friend of mine who has an undergraduate degree in accounting and has two master’s degrees—one in Human Resources Management and the other is in Taxation and who has spent over the last decade working with human resources, business operations, ecommerce, beauty, tech, and start-ups.

When I ask Weeber how she describes the entire field of human resources she tells me, “HR is the overall management of the workforce and culture in a business including training, development, engagement, retention, and regulatory compliance. Ultimately why HR and people opps are important is in part it helps set the culture and branding from the inside. What you are doing is fostering a company culture that is grown, not made. You want to make sure that you are setting values that are functional and applicable to every decision you will be making in the business, so you are consistent. This is something that most larger businesses do over time. However, with smaller businesses you typically have fewer resources, including time and money. So if you are able to set these systems up in an efficient way early on, you end up saving yourself headache, money, and minimizing your risks in business in the long run, which means that you can focus on the true mission of your business.”

With that said, here are Weeber’s top five mistakes that she sees businesses making and how to address them.

Culture That Doesn’t Start At Day Zero

This may sound woo-woo, but culture does start at day zero. But as you are conceptualizing your business and getting it off of the ground you have to think about your company branding not only for the public, but for your employees. You need to know what your mission, values, and mindset are all part of the tissue of who you are as a business. When this is done, it creates a healthy company culture inside and out.

When this isn’t done from the onset, it creates confusion, frustration, mistrust, and it also increases risk. Think about this from a PR standpoint, when people find out a company who touts having a forward-thinking culture or product and it gets out in the public that they treat their employees unfairly, it creates mistrust with the internal team and any partners you may work with, and it can put your company at risk for losing customers who value no longer align with theirs.

One way to address this early on for any business is setting your mission for your business and implementing those consistently. This information can go in the employee handbook, made available to the public on the company website, or an internal communication platform for your employees, like Notion.

Not Being Compliant

Every business is governed by regulations specific to their industry in addition to federal, state, and local laws. Prioritizing safety and regulatory compliance is critical. If this infrastructure is not set up properly, it could cost you dearly up to and including having your business shut down.

When it comes to beauty business owners, you must be Occupational Safety and Health Act (OSHA) compliant because you want to keep your employees and customers safe, and you want to mitigate having to pay any fines. Risks of not following safety laws not only hit your pocketbook, but your reputation. You can be fined by federal and state agencies, in addition to having very high worker compensation insurance. It can also tee you up for a lawsuit due to being negligent.

For businesses to be compliant, familiarize yourself with the laws that govern your industry and location like the Department of Labor for employee laws, Fair Labor Standards Act which establishes record keeping, standardized, pay, and overtime, Americans with Disabilities Act for laws governing those with disabilities, the Equal Pay Act that establishes pay standards, Fair Family & Medical Leave Act that addresses leave for these circumstances. A few other laws that are crucial are Title 7 of the Civil Rights Act of 1964, which prohibits employment discrimination against sex, race, religion, and national origin. Websites like shrm.org and your worker’s compensation provider can provide resources on how to maintain compliance.

When it comes to beauty businesses specifically, it is important that your practitioners only perform services within their scope of license otherwise, this could be a non-compliance issue for your business that costs you.

Lack Of Training Or Development Of Talent

Finding and retaining good talent can be a challenge for any business, especially small businesses. One of the biggest mistakes any business owner can make is not investing in their internal team. When training is provided it improves productivity, efficiency, and helps generate more profit in the long run. Moreover, it helps with company morale, increases the likelihood of attracting star talent, helps to retain existing team members, and improves job satisfaction.

For beauty business owners, investing in continued education for their team members whether that be paying for it fully or providing a stipend for your practitioners to gain more skills, is critical for the long-term success of your business. It also helps to mitigate the associated risks from practitioners’ errors that can occur when working with the public and may even help with reducing insurance premiums.

If you don’t have training or development programs set up, you are putting your business at risk of being bypassed by your competition. Education provides your team with cutting-edge training that keeps your business ahead of the curve. Beauty consumers specifically are well-researched, and this space is highly competitive. If you don’t stay on the cutting edge with training and the technologies you offer, you will fall behind and become a dinosaur in the blink of an eye—especially with technological advances occurring rapidly.

Offering Below-Standard Compensation & Benefits

You get what you pay for. As a beauty business owner, you need to be informed about industry pay and compensation standards. Smaller beauty businesses may not be able to provide a salary like L’Oreal. But if you can benchmark your competitors, you can have a strategic advantage when it comes to sweetening the pot to attract the best talent for your business. This could be in the form of stock options or other ancillary benefits like unlimited PTO or schedule flexibility. You should survey or have conversations with your team to see what kind of feedback they have regarding your compensation and benefits and cater the benefits to what they want and need rather than simply offering benefits that won’t incentive them.

Conflict Resolution Protocol Not Being Established

Whether it is internal conflict, performance improvement, or giving or receiving feedback to team members, handling conflict should be done with grace and professionalism. If these issues aren’t handled with care, there can be a breakdown in communication within the organization and with the employee experience creating what is known as “lizard brain”, which creates a fight or flight, fawn, or freeze response that can create a sense of distrust within the organization and negatively affect productivity. Furthermore, you could experience high employee turnover as a result that could affect your beauty business’s efficiency, bottom line, and even lead to a lawsuit if not handled properly.

To ensure you have conflict resolution protocol properly set up, first and foremost your managers should be trained accordingly with the company’s standardized approach to conflict resolution including instances where a manager is giving and receiving feedback, so everyone is on the same page when communicating these issues. Issues should also be addressed in a timely manner to prevent issues from snowballing. When it comes to conflicts that require investigation, you need to make sure you are familiar with the best practices that include acting quickly, acting in confidence and discretion, and escalating issues that need to go higher up when necessary. Businesses can provide this protocol in the employee handbook, so the process is made clear to everyone. In some states, investigation protocol is required to be communicated to employees in the handbook.

For more information about Jules or to contact her about her human resource consulting services, you can email her at: juliemarie.weeber@gmail.com or visit her Linkedin page.

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