How Bad HR Can Destroy Your Company

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Product marketing, campaigns, and strategies are all important parts of a company’s existence. However, they all depend on one particular facet of a company – the HR department.

HR has a critical role in the function and development of every company. Employment, benefits, performance reviews and everything else depends on a “well-oiled” HR department.

Just as great HR can take your company to the next level, bad HR can destroy it. In this piece, Eugene Eaton analyzes some of the ways  bad HR can be detrimental to your business.

Here’s what you have to watch for if you want your company to grow.

Key Takeaways:

• HR should provide clear rules and policies with a handbook or instructions for employees to follow.

• Make sure that your HR department has complete employee records incase of any issues or disagreements.

• Not having efficient training programs can cause new employees to be confused and have their performance suffer because of it.

How Bad HR Can Destroy Your Company

1. Non-compliance with governmental regulations. Employees are not the ones who have to care about regulations and laws being respected. This responsibility is solely in the hands of your HR department. Therefore, you need to have a dedicated team able to prevent any problems before they appear.

   Erica Ferguson, Director – People Development at UK CareersBooster gave her take on the importance of HR: “It is of the utmost importance to pick the right people for your HR team. They have to be the ones to keep a watchful eye over the compliance with regulations. Smooth obedience of rules allows other employees to do their job and the company to grow.”

2. Unclear personnel rules and policies. A company functions according to a set of rules that each employee has to respect. Different positions require different regulations. If your HR is bad, the company will take a massive hit because nobody will be aware of their obligations and responsibilities.

   To ensure that everyone is doing their part, your HR department needs to provide handbooks with clear instructions to your employees. Also, your HR team should review and update these handbooks as time passes. Employees must know what you expect of them if they are to perform accordingly.

3. Inefficient recruitment. To get the best experts to join your company, you need to have an effective and a creative recruitment strategy. People who are the best at their job aren’t desperate to take a position in your company.

   Candidates will only accept the job if the recruitment process is handled well. Before they even step into the interview room, they have to know what their tasks will be and what are your goals.

   Having bad HR leads to people refusing to join your ranks. As you won’t be able to attract the most prominent efforts, your performance will suffer greatly. A well-thought-out on-boarding process eases the transition of new employees and is an important chapter in every good recruitment strategy.

4. Chaos with payments and benefits. For a company to run like a well-oiled machine, the benefits and payroll must be executed flawlessly. A bad HR team will often delay payments, provide unclear information and cause general unrest in your employee ranks.

   No serious person wants to work under such conditions. Keeping your payroll and benefits clean requires a lot of paperwork and a good HRMS.

   Good HR is a must in this situation (an every other) because covering people’s payments is what keeps the company running. If you have bad HR, people will abandon their positions because of a lack of financial security. Digital solutions and AI can help your HR solve any problems much more efficiently.

5. Confidentiality breaches and missing employee files. Issues and disagreements can happen in any company. To make sure everything is transparent, your HR department needs to have complete employee records.

   • The records must include their work history, performance grades and accomplishments and any other type of data related to your company-employee relationship. Bad HR can cause a myriad of problems when there is a miscommunication.

   • Employee lawsuits can damage your employer brand if you don’t have complete records. To protect the integrity and the very existence of your company, you need to have everything on record and available to authorities.

   • Another problem can arise concerning HIPAA regulations and confidential documents. Some data, mostly parts about eligibility/citizenship documents must stay confidential. Your HR department has the most important role in keeping your employee data safe and secure.

   • Bad HR can lead to data leaks, confidentiality breaches, and other problems. Such problems will not only alienate your employees, but you will be hit hard by the authorities. Therefore, proper HR processes are necessary for keeping everything in check and preventing such problems from arising.

6. A lack of effective induction and training programs. The onboarding program is an incoming new employee’s firsthand experience of the company. It is something similar to the popular phrase ‘a first impression is the last impression’. The HR team must organize a comprehensive and a structured orientation or induction programs spread over multiple days to ensure a smooth entry of the new employee in the company’s system. The first few days are very sensitive and no stone should be left unturned.

   • HR doesn’t revolve around data security and management. It is their job to be acquainted with the nature of every position, to train new employees. Even the most prominent experts need time to adjust to the demands of your particular company.

   • Having a good HR department allows you to brief them about their obligations and tasks and they will be able to assume work in no time.

     Bad HR results in mediocre efficiency. People won’t know what they’re supposed to do and they won’t be able to complete tasks. HR revolves around training and developing your employees, ensuring that everyone knows their role and that there won’t be any miscommunication.

   • When an employee sees that they can’t rely on your HR, he or she will become hesitant to ask for help. As a result, his or her performance will suffer, and there won’t be a pleasant atmosphere in the workplace.

   • Therefore, you need to pick the most dedicated professionals for your HR team. Every team member should be well versed in your company and how to integrate new individuals accordingly.

How Bad HR can Destroy Your Company FAQ

1. How can HR negatively affect your business?

   A bad HR department can cause employee conflicts, have inadequate training for new employees, and have poor team building. Human Resources is the department that is responsible for overseeing the administrative functions for any company. If they are unable to be effective it can lead to inefficient hiring, improper training, which can lead to low employee morale with causes a high turnover rate.

2. What are the most common HR issues?

   The most common HR problems in a company include:

   • Compliance with laws and regulations

   • Landing top talent

   • Retention rates

   • Compensation management

3. What should HR not do?

   HR should avoid micromanage employees as well as making any false promises during the recruiting process or to any current employees. Employees want to feel like they can work independently without needing supervision constantly, so micromanaging can end up causing a decrease in productivity. Also HR should avoid making any promises to any candidates about compensation, benefits, or even getting the job. Making empty promises can cause distrust with employees.

4. Can a company run with out an HR department?

   There is no rule stating that a company needs an HR department. While there is no rule stating the need for one, it’s advised to have a full-time HR staff when there are at least 10 or more employees at a company.

Final Thoughts

Be diligent when picking your HR team. The HR department directly determines the fate of any business. When your recruitment process is not running smoothly, you won’t be able to attract experts. If somehow you manage to hire competent personnel, they won’t appreciate late payroll processing, an unimpressive induction program, logistical issues, or poor training programs. This can result in a high attrition rate and your company won’t be able to sustain growth.

Author

Jenn Steele

Jen Steele is a dynamic, results-driven leader with over two decades of experience in the technology and marketing industries. As the CEO of KissMetrics, Jen is responsible for driving the company's strategic direction, growth, and overall success.