Don’t Make These 5 Human Resources Mistakes at Your Small Business

Author: Cindy Yang | November 17, 2015

Starting a business comes with a multitude of challenges, such as learning how to get a business loan, marketing your company and handling the finances.

But some entrepreneurs find the greatest challenge is dealing with their staff. Whether it’s hiring or managing employees, even those who are confident in their people skills can fumble the first time.

Here are five mistakes that small-business owners made with human resources, along with the valuable lessons you can learn from them. Their responses are edited for clarity.

1. Don’t wait too long to hire your first employees
“One of the biggest mistakes I made when I first started my business was not getting good people aboard as quickly as possible. Operating on a shoestring (and a broken one at that), I originally had to do everything myself. The thrift that made it possible for me to survive and then thrive in the beginning quickly became a hindrance when I delayed hiring people who could do any number of specific tasks easier, cheaper and far better than I could.”

— Barry Maher, owner of Barry Maher & Associates in Corona, California

2. Don’t wait too long to fire bad employees
“I started my company 14 years ago. My biggest mistake was not getting rid of weak people earlier than I did in the first few years of my business. I knew in my gut they were not up to snuff, but out of loyalty to them I let them hang around much longer than they should have. It would have been better for everyone to let them go as soon as the signs were there. They became more insecure and threatened as we grew, which was not productive for the team. As soon as I let them go, the culture got stronger and the bar higher. ‘A’ team people like to be surrounded by other stars. It is true that you should hire slowly and fire quickly!”

— Paige Arnof-Fenn, founder and CEO of Mavens & Moguls in Cambridge, Massachusetts

3. Beware of giving too much responsibility to new hires
“A mistake I made was giving the newest hire a job that had a lot of responsibilities as well as deadlines that — if he made a mess — would hurt my business. The person was spotless on paper, and showed knowledge and passion through the interview, but I didn’t properly test him and didn’t start with a trial. It cost me, as he was a completely different person when working and managed to wreck the project.”

— Ratko Ivanović, manager at EnCoCreative in Sydney, Australia

4. Don’t hire first employees who are too green
“For a few just-out-of-college entrepreneurs, hiring our first outside employee was a defining moment. We wanted to hire a sales rep that would allow us to focus on instructor relations, development, and product planning. We learned soon enough that you can’t assume you can easily mold new graduates to eat, sleep and breathe your business. It became clear that setting expectations and having all the tools and training in place to allow an employee, and specifically a sales rep, to hit the ground was essential. When our first hire didn’t work out, we made sure to find someone with at least 10 years of sales experience who had worked in a startup environment. The willingness to grow with the company and work not for commission but for the growth of the company was a defining moment for the development of our sales team.”

— John C. Hayes, CMO of in Austin, Texas

5. Stop following management fads
“The latest management fad is just that, a fad. I spent way too much money investing in the latest management theories and software in an attempt to be perfect. I forgot that no person or business process can ever be perfect. The best way to achieve work-life balance is to implement now and perfect later the systems and processes currently used at work. Your clients don’t care about the customer service, quality control, 5S, Kaizen and Kanban programs you have implemented. All they care about is whether you deliver a quality product or service at a fair price. Trust yourself and your employees. You know what to do without spending excessive amounts of money on consultants and software.”

— Victor Clarke, owner of Clarke in Lynchburg, Virginia

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