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Recipe for Trouble:Human Resources

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Published: 28Jan2009
Word count: 501
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When you are stating a new business, or even if you have been in business for some time, one of the easiest things to overlook is human resources. When your business is small, you might have a nice family-type atmosphere. You may be spending more time at work than you are at home. It is easy to forget that people are your employees not your family.

Taking human resources for granted can be one of the most costly things you can ever do in your business. The rules governing employees are complex and strict. More often than not, in a legal dispute, the court is more likely to take the side of the employee, particularly when good documentation is not available. There are things you can do, however, to keep you and your business out of trouble.

First, never forget that this is a business and you have a business relationship with the people that work for you. That doesn't mean you can't have fun or that you have to run the business with an iron fist or that you have to be paranoid about your employees. It does, however, mean that you need to be sure that you are following all the regulations, both federal and state. It also means that you need to make sure that you have good procedures in place to document problems or issues.

How can you protect your employees, your business and yourself? There is no one right answer, but there are several options. The first option is to hire a human resource person. This person can take on the responsibility of insuring that you are complaint with all regulations. They can also assist with hiring, firing, employee evaluation and variety of administrative functions. Your human resource person can also act as a liaison with your employees when there are issues.

A second option is use a professional employer organization or PEO. The PEO serves as the HR department for your business. They can provide all the administrative services that a regular HR department would provide, but they also provide other services such as payroll and employer tax assistance. Because the PEO functions as a group, they can also provide benefits such as healthcare and dental and sometimes at a significantly lower cost. But perhaps the biggest advantage to outsourcing your human resources is helping to eliminate many of the employer liability risks. Since PEOs are a one-stop shop, you can also be sure of complete coordination of your human resources and payroll. PEOs can be a little pricey, particularly for small businesses with less than 10 employees, but they can definitely alleviate a lot of the stress surrounding human resources.

Whatever option you use to handle your human resource needs, don't take shortcuts. The legal fees from one employee lawsuit can devastate a business, even if you ultimately win. Remember that your employees are your most important resource. Take good care of them and they will take good care of your business.

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