Common HR Mistakes

Common HR Mistakes and How To Avoid Them

Outdated policies and inadequate documentation can cause even the strongest companies to stumble when it comes to HR issues. When was the last time you updated your employee handbook? Are you sure it covers everything it should? Do you have a policy in place for handling employee complaints? Slip-ups in recruiting, dismissing, employee paperwork and other areas can hinder your company’s growth. The aim of this post is to provide the knowledge you need to become more proactive when it comes to managing HR policies and procedures and will help you spot the most common HR mistakes.

Keeping up with employment legislation can be overwhelming for small business owners. But ignoring HR compliance and employer liability can lead to costly employment tribunal claims and financial penalties.

Common HR Mistakes and How To Avoid Them

Mistake 1 – Not Having A Written Contract of Employment

Many new clients that come to me don’t have written Employment Contracts. When I ask why some say employees don’t read them because they are too long and wordy, so why waste money. Whilst others say they bring too much red tape. However, having the right documentation in place will benefit and protect your business.

Why a written contract of employment will benefit your business:

  1. Clarify expectations by setting out the hours and days that the employee is expected to work. This ensures that everyone knows what they need to do and when. Your employee cannot feign innocence when they are pulled up for disappearing at 3pm on a Friday, because the contract will clearly state that their working hours are 9am to 5pm Monday to Friday;
  2. Set out your rights as the employer when things don’t work out with an employee. The right clauses in the contract will give you the right to terminate their employment but put them on garden leave or pay them in lieu of notice (if you do not want them to work their notice). Lay-off clauses will allow you to temporarily lay-off staff if there is a shortage of work, this is not dissimilar to furlough, just without the substantial Government’s contribution;
  3. Set out the expected length of the relationship, if you only want an employee for a specific period you need to make that clear from the beginning. If you simply agree that the employee starts on 1 July and there is nothing to suggest a fixed term, you will have difficulty ending the period of employment legally;
  4. Explain how to end the relationship, having an employment contract means that both parties know how they can walk away and terminate the relationship with the least negative impact – this means that they will know what notice needs to be given and at which point so that it is not leaving the other party in a lurch; and
  5. Clarify post-termination expectations, after the relationship has ended, you will want the employee to still have obligations of confidentiality and, depending on the industry, you may even want them to have some restrictions as to who they can work and poaching staff and customers (known as restrictive covenants) so that you protect your business interest, while not restricting their ability to earn a living.

Section 1 Statements
On 6 April 2020, the requirement for employers to provide a Section 1 Statement (in accordance with the Employment Rights Act 1996) changed.

The main change is that the right to a section 1 statement will become a ‘day one’ right. This means that all new employees will be entitled to receive a written section 1 statement on or before their first day of employment (only limited information can be provided after this point). The rules about what must be included in the Section 1 Statement also changed. This means there is less opportunity to refer out to another document such as an Employee Handbook. The aim of the changes around the Section 1 Statement are to increase transparency between workers and employers as well as improving the enforcement of employment rights.

Read about my Section 1 Statement of Main Terms and Conditions of Employment. Read Section 1 Statement of Main Terms and Conditions of Employment

Mistake 2 – Not Having An Employee Handbook

Clearly defined HR policies are fundamental to your company’s success. They protect your business and educate employees about what you expect from them.

A well written employee handbook can help your business, even if you only employee one person, avoid misunderstandings and minimise risks regarding employment tribunal claims. These claims often stem from inconsistent treatment of employees or a lack of clarity in policies and procedures. Handbooks that outline policies and guidelines not only provide expectations for employee conduct, they also create a framework to guide management and leadership – helping to ensure policies are enforced appropriately and evenly across departments.

Once introduced your employee handbook will provide a firm foundation for your business and will grow with your business.

If you a very small business with yourself and maybe your son and daughter, you are probably going to be ok. But if you employee people outside your direct family, even its only one person you should have an employee handbook.

Ready To Go Employee Handbook
My Ready To Go Employee Handbook provides a simple but professional Employee Handbook which is ideal for new businesses and those on the tightest of budgets.

If your benefits structure reflects the statutory provisions and want to implement a simple yet professional employee handbook then my Ready To Go Employee Handbook will provide an excellent starting point.

All you need to do is provide a few basic details and I will create your ‘Ready to Go’ Employee Handbook which will then grow with your business.

Read about my Ready To Go Employee Handbook. Read Ready To Go Employee Handbook

Mistake 3 – Forgetting To Update Your Employee Handbook

Your Employee Handbook is a vital document during the induction and probation periods of new employees. It provides an essential guide to working at your company and introduces your new employees to your culture and values. The importance of the Employee Handbook doesn’t end there though, it continues throughout the employees’ period of employment with you. It will be the first place the employee turns to for information about everything from company policies to benefits and housekeeping arrangements. Your Employee Handbook should support your Section 1 Statement by setting out how employees are expected to conduct themselves, who they can turn to if they need support, and what they can expect from you as their employer. It’s important therefore that your employee handbook is updated on a regular basis.

When Should You Review Your Employee Handbook
When it comes to major sporting events interest generally grows as a team progresses through the event. As the 2022 FIFA World Cup starts on 21 November and ends on 18 December 2022 the requests for time off to watch key matches are likely to compete with other requests for time off in the lead up to the Christmas period. If you are in the position of not been able to grant all requests you should deal with them in the same way as other periods of high demand. This might mean declining a request, asking another employee to change an already approved request or cancelling a previously approved request.

Read my Top Tips to When Should You Review Your Employee Handbook. Read Review Your Employee Handbook

Mistake 4 – Outdated Interview and Recruitment Process

When you are recruiting, whether it’s your first employee or you are adding to your team, it’s really important that you get the right person. When I’m talking about recruitment, I always recommend a little planning and a simple consistent process that can be followed each and every time you recruit.

Here are some factors to consider when you are recruiting:

  • Skills: Does the candidate have the basic skills required to carry out the job functions. What soft skills, such as negotiating, persuading or emotional intelligence, do they have?
  • Job experience: What is their job experience? How has what they’ve done in the past going to benefit your business in the future? How much training will they need?
  • Education: Do they have the education necessary to perform the duties?
  • Team relationship: Can they work alongside others, if needed, to reach a common goal? How will they fit in with the current team?

12 Top Tips To Recruiting Your Next Employee!
Time and time again clients ring me for advice on how to deal with a recent new recruit who simply cannot do the job or just doesn’t fit in with the culture of the organisation and the rest of the team. The route of those problems is generally a rushed recruitment process!

Read my 12 Top Tips To Recruiting Your Next Employee! Read 12 Top Tips To Recruiting Your Next Employee!

Mistake 5 – Failing To Carry Out Pre-Employment Checks

Recruiting a new employee is an exciting time but it also presents a risk to your business. You will be trusting your new employee with your business processes, assets and reputation. So, it makes sense to double check that your squeaky-clean new employee is WHO THEY SAY THEY ARE!!!

Pre employment checks are often seen as a time-consuming exercise that frequently gets shelved. But this is your opportunity to check that the facts your new employee has given you stack up and are genuine.

Pre-employment Checks
One of my clients was recently recruiting a Marketing professional. We interviewed a small selection of candidates and two stood out from the others. We brought them back for a second interview where we asked them to bring some examples of their work and asked them to complete a short exercise for us. The business owner then made his choice and we offered the job.

Everything seemed fine. The new recruit accepted the role and returned all the new starter documents except the information about previous employers that we could contact for references. I chased this up a few times and became a little suspicious.

Ultimately, I phoned the existing employer and asked to speak to the Marketing Coordinator, the role title our candidate had given us. Surprisingly our candidate didn’t answer the phone so I asked the person who did a few simple questions. It turned out our ideal candidate was in fact the Personal Assistant to the Head of the Department and the work they’d shown us at the second interview was not their own. Further investigations into the qualifications they claimed to hold showed they were fake.

The sad thing is that the business owner was quite happy to recruit someone who could grow in to the role. So had the candidate been honest with us from the beginning they would probably have still been offered the job, although at a lower salary. As it was the business owner no longer felt he could trust the candidate and therefore decided to withdraw the offer.

Read my post The Importance of Pre Employment Checks. Read Pre Employment Checks

Mistake 6 – Lack of Job Training

For employees to grow with your company, they’ll likely need professional development somewhere along the way. Training and development can range from helping employees develop skills – think Excel or WordPress classes – to providing tools and training to become a great leader. Unfortunately, lack of job training is among the bad human resources practices that business leaders fall into.

Getting the best out of people benefits the individual and the Company. Development does not have to be about expensive training courses, but must provide appropriate and relevant development for individuals – tied to the job they are doing.

Training begins when an employee joins your team in the induction and probation processes. Proper induction and probation training sets the right expectations and can prevent issues later.

The first few months in a new job are a crucial time during which the new employee will be deciding whether the job and business are right for them. When new recruits leave a job quickly it’s often because they have found the same emotional connection to their new job and colleagues that they had in their previous roles.

The main benefit of an induction process is that it increases your new employee’s understanding of your business and it helps them to adjust to working in it.

  • the new employee will settle down and make a quicker transition into both their job and your way of working
  • the new employee will be better informed about the structure of your business and your systems and procedures so they understand what is expected from an early stage

The sooner your new employee picks up “this is how things are done around here” the quicker your culture will become second nature to them.

Although there is no legal requirement to have a probationary period, using probationary periods effectively means that a formal mechanism is in place to ensure that any concerns about the employee’s conduct or capability can be addressed at an early stage.

The primary purpose of using probationary periods is to provide a clear framework for assessing the suitability of new employees in terms of performance, behaviour and attendance against the standards you have set for the role.

This means when you use a probationary period you should clearly set out your standards and expectations from the very start so the new employee fully understands what you expect from them in terms of performance, behaviour and attendance and the consequences of failing to achieve those standards.

Within your workforce, you might also find employees you want to develop into the company’s next leaders. One big HR mistake small businesses make is promoting an employee without giving them adequate management training beforehand. You can’t just take that outstanding employee and drop them into a leadership role. Just because an employee is a competent technician, accountant or administrator does not mean that they will be a competent supervisor or team leader. Here are some skills you’ll want to impart:

  • Team building
  • Coaching and Visioning
  • Negotiation
  • Conflict Resolution
  • Communication

Induction and Probation
Time and time again clients ring me for advice on how to deal with a recent new recruit who simply cannot do the job or just doesn’t fit in with the culture of the organisation and the rest of the team. The route of those problems is generally a rushed recruitment process!

Read my Benefits of a Good Induction Process. Read Induction Process

Read my Probationary Periods – Best Practice. Read Probationary Periods

Mistake 7 – Mismanaging Employee Data

Employee records and human resources administration can seem time consuming. But proper employee recordkeeping can help keep you in compliance with regulatory agencies.
Often, employee records include sensitive personal data such as:

  • Home Address
  • Date of Birth
  • Driver License Number
  • Passport
  • National Insurance Number
  • Bank Account Information
  • Health or Medical Information
  • Personal Contact Information

Mishandling this information ranks high among bad HR practices. Managed improperly and releasing it to the wrong people could put an employee at risk and your company in hot water. You’ll need to have protocols in place for collecting, storing and maintaining sensitive employee information.

The employee personnel file is the main employee file that contains the history of the employment relationship from employment application through exit interview and employment termination documentation.

In addition to having a secure system, employers should conduct audits of employee files to ensure they are thorough and up to date.

Employees should also have sufficient and easy access to their own data and files. For more on this and other HR mistakes that businesses make, download the e-book.

Suggested Content of an Employee Personnel File
The employee personnel file contains the history of the employment relationship from employment application through to termination documentation. Only key members of staff such as Human Resources staff, the employee’s immediate supervisor and line management should have access to the personnel file.

Personnel files are generally stored in locked, fire-proof cabinets in a locked location that is accessible to a limited number of individuals for instance Human Resources staff or the Managing Directors PA in a smaller organisation. The confidentiality of the employee information in the employee personnel file is of paramount importance.

Read my post Suggested Content of an Employee Personnel File. Read Employee Personnel File

Mistake 8 – Lack of Documentation to Support A Dismissal

Having candid conversations with employees who aren’t performing well isn’t easy. But documenting those employee performance conversations is important, especially when terminating the employee is the result of continued poor performance or behaviour. What you need is a progressive discipline policy. While it provides employees an opportunity to improve their performance or behaviour, it also can support decisions to terminate or demote that employee.

If you don’t have the documentation that shows a pattern of poor performance or behaviour, small businesses may open themselves to claims for wrongful or unfair dismissal or even a complaint of discrimination.

Recommended steps to follow in a progressive discipline policy:

  1. Informal Counselling: discuss the specifics of the employee’s poor performance or behaviour. Although informal the discussion and outcome should still be documented and put in the employee’s personnel file.
  2. Written warning: meet with the employee and give written information detailing how the employee hasn’t met your expectations, the expected course of action and consequences of noncompliance.
  3. Final warning: similar to the written warning, but with the added caveat that any further performance issues will result in termination.
  4. Dismissal: this is a meeting where you notify the employee that their employment is terminated. Provide confirmation in writing that explains final pay, collecting company property and retrieving employee’s personal items.

Top Tips

ACAS no longer recommend the use of Verbal Warnings: the fact they are verbal but usually confirmed in writing caused confusion as to whether they were in fact a written warning. That doesn’t mean you can’t have a verbal stage, just call it something else such as an informal counselling as I’ve suggested here.

The recommended steps outlined here suit the smaller businesses, if you are a larger business you might chose to include a first and second written warning stage before moving on to the final written warning.

Finally, always include a caveat in your disciplinary policy that allows you to jump a stage in an employee has demonstrated a particularly severe pattern of poor performance or behaviour.

Conducting a Fair Disciplinary Hearing
On completion of the disciplinary investigation a decision needs to made as to whether there is a disciplinary case to answer. If the answer is yes, then the next step will be to arrange and conduct a disciplinary hearing to allow the employee to formally respond to the allegation(s).

What is a Disciplinary Hearing?
A disciplinary process in a work environment is different but based on the same principles of a criminal investigation, with a disciplinary hearing not entirely too dissimilar to a trial.

Read my post Conducting a Fair Disciplinary Hearing. Read Conducting a Fair Disciplinary Hearing

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HR doesn’t need to bureaucratic, but it does need doing otherwise you risk receiving time-consuming and expensive claims against your business.

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Common HR Mistakes and How To Avoid Them


Kathryn is a highly experienced HR Manager with a wealth of skills and knowledge acquired across a variety of industries including manufacturing, health and social care and financial services. She has worked in small localised business and larger multi sited organisations and is comfortable liaising with senior managers and union officials as well as answering queries from team members. Connect with Kathryn on:

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