Lancer Insurance
Monday, June 24, 2024


OUR INDUSTRY IS PRIMARILY COMPOSED OF THOUSANDS OF SMALL COMPANIES, and every owner knows that running them can be both exciting and exhausting in equal measures. To help you correct any personnel-related missteps you’re inadvertently making, we’ve compiled a list of the top five HR fails we see most often.

1 Termination Without Documentation

Too many times we find employers who are at “the end of their rope” with problem employees. Unfortunately, when we meet with them about the issues, these managers do not have any notes documenting the problematic incidents or the dates and results of those incidents. Although most states are at-will states—meaning that employers and employees can terminate employment for any reason or no reason—employers still need to realize that employees can claim unemployment and file an EEOC claim if they feel they have been wrongfully terminated.

An employer’s best line of defense against those claims is to have all incidents fully documented and to provide the employee with a termination notice that clearly outlines the reason for dismissal. According to Mary Gorski and Denise Tataryn, who authored the white paper Legal Landminds: 2009 Law Changes Could Impact Your Business, “Employee lawsuits have risen 400 percent in the last 20 years,” and of those lawsuits, 41.5 percent are “private employers with between 15 and 100 employees.”

2 Keep ‘em Separated

Did you know that all I-9s should be in one file to differentiate them from employee files? Or that doctor’s notes should be kept apart from performance reviews? What about notices for garnishments: Where should those be kept? Personal identifying information needs to be in a file separate from records pertaining to the employee’s performance on the job.

Each employee should have a “Performance Record” that includes notes related to job performance, disciplinary actions, requests for scheduling changes, performance reviews, job descriptions, and employment application (check to be sure your application does not ask for birth dates or social security numbers).

A “Compliance Record” should contain all documentation that contains identifying information such as social security numbers, dates of birth, medical information, emergency contact information, etc. This file should be kept in a separate, locked filling cabinet to which managers and employees do not have access. All completed I-9s with no copies of documentation should be kept together in one file, also under lock and key. Maintaining files in this manner allows managers, employees, and outside auditors to see the information they need without risking inappropriate access.

3 Quick to Hire, Slow to Fire

We’ve all been there: An employee leaves without prior notice and we are left with an overnight shift that needs to be covered. We scramble to post the job, review resumes and applications, interview candidates, and hire our next employee. The issue with hasty hiring is we forget to consider if these new employees will even be a good, long-term fit for our company culture. And did we properly interview them to ensure they can cover the shifts that we need covered? Do they have the proper experience? What are their expectations for the job?

Employee lawsuits 400 percent in the last 20 years, and of those lawsuits, 41.5 percent are private employers with between 15 and 100 employees.” – Data from Mary Gorski and Denise Tataryn

Think about the loss in productivity and the high costs of turnover when we simply put a warm body on a shift. Likewise, when we keep an underperforming employee because we simply do not have anyone else to cover that shift, we stand the chance of creating animosity between good employees and management. Average and high performers begin to wonder why management is choosing to keep low performers on board—but, more importantly, what is it doing to the bottom line?

4 Over-promising and Under-delivering

One of the biggest challenges we face as employers is recruiting top performers for our organizations. We are so desperate to find and retain those employees that we tend to overstate the earning and advancement opportunities. We promise an average hourly rate based on a full-time schedule, but we don’t have enough work to schedule them on a full-time basis; we tell the new hires that we will cross-train them so that they can move up in the ranks and earn a higher salary, but we fail to provide the training; we tell new employees that they are required to work two Saturdays a month, but then schedule them for three or more.

What’s the ultimate result of these broken promises? Unmotivated employees who don’t trust their management team. Be sure to only promise what you can provide, and be sure to follow through.

5 Sink or Swim

According to a survey conducted by Bamboo HR in 2014, 33 percent of 1,000 respondents said they quit their jobs because they had insufficient onboarding/training in order to perform their jobs effectively. A properly structured orientation program during the first few days or weeks of hiring is crucial to their success. We tend to forget that the new hire doesn’t know what we know: Just because the person worked as a dispatcher for another company does not mean he knows the way your company operates. The sales manager we just brought on board has 10 years of experience, but does that experience directly translate into our line of work?

The cost of employee turnover for entry-level positions is between 30 to 50 percent of annual pay and upward of 150 percent for mid-level employees. Let’s save ourselves the hassle and cost of employee turnover and ensure we are properly preparing our new hires for success!

With all of the regulations required by the DOT, DOL, and local, state, and federal governments, it is nearly impossible for a small business owner to stay apprised of not only regulations, but also the best practices for each component of business. There are plenty of HR and employee management issues that affect you every day: Send us your questions so that we can address them in a future issue. [CD1115]

Christina Fiorenza is the HR Director for The LMC Group. She can be reached at