The most common HR mistakes start-ups make and how to avoid them.
We’ve worked with hundreds of Australian businesses over the past 17 years, helping them manage compliance, employment law, recruitment and performance risks. If you have a small or medium-size business or are looking to set one up, here’s what you need to know.
1. Recruiting strategically – right fit, right skills, right time
The people you want on the team from day 1 aren’t necessarily the right people to help scale the company down the track. From day one you’ll possibly want team members that can perform multiple duties and tasks and are self-starters. As you grow, the requirements change and the original team may not be the exact mix you need. In those early days, you may need to consider leveraging contractors as well as outsourcing where possible to maintain flexibility.
Another key consideration when recruiting early on is how important it is to get people that are the ‘right fit’. This is even more important when it’s a smaller team and each employee has a greater impact on culture and behavioural norms.
2. Role clarity – be clear about who does what from the start
It may sound like overkill for a start-up to be worried about drafting job descriptions, BUT, it’s really important to at least have some clarity for you and for the employees you are bringing on, to know exactly what you want them to do, what is the minimum expectation and how you’ll be measuring their performance.
3. Compliance – employment law
As the saying goes, ignorance of the law is no excuse. Laws around employment are heavily regulated with a wide range of related legislation. Non-adherence can be very costly through potential litigation or fines. Make sure you are across the relevant laws that apply for your industry and business.
4. Compliance – modern awards and pay
This is a really common area of risk for entrepreneurs in any industry. The Fair Work Ombudsman has made specific reference to the need for entrepreneurs to get this right from the very start to avoid costly penalties. It is crucial that businesses understand what modern awards may be applicable to their employees, and any minimum pay rates based on specific classifications. Additionally, provisions such as overtime, allowances or loadings must be understood and paid if applicable.
5. Termination of employment
Typically things move fast in a start-up and you need to act quickly, be it a business decision or the need to manage someone out of the company. This is a common area where many businesses slip up, often resulting in lost time and money. It is essential that any termination of employment is done so in compliance with employment law (Fair Work Act). Employers have some protections from claims of unfair termination, however, it is still essential that the Small Business Code is followed.
TALK TO A SPECIALIST
To minimise your risk and optimise your business for HR peace of mind, or if you have any questions, we’d love to help.
Contact your 360HR team member or our Corporate Head Office on email and 02 9819 6324.