HR is one of the most important components of a small business because they are directly responsible for building and shaping the staff.
Day in and day out, the largest challenges that an HR manager will face are related to trying to put together equitable reward programs that guide workers in the right direction.
Here are some specific compliance challenges that are common in HR- along with some popular ways of handling them:
Parental leave: It may sound strange, but parental leave was not something that was taken advantage very often by spouses of women having children. Instead, there was often quiet pressure to keep working. Then, in states where they passed laws for parental leave, parents of unborn children began to be more interested in taking some time off to bond with their child. The result was good for families, but it became a compliance challenge for companies because the dissuasion from co-workers often continued due to the need to have everyone working at all times. Eventually, Human Resources departments at various companies were able to make it easier for those that were working to take time off by using their power to ensure that there were no repercussions by management when a worker took time off.
Equity theory failing: Another type of compliance failure takes place when the competitive environment gets a little too competitive because people see that others see to be receiving too much attention while they are not receiving the rewards or accolades that they think they should be. When a worker has this type of behavior because they perceive inequalities, it is known as an equity theory-related problem. One of the surest ways of combatting equity theory problems is to have HR look at the underlying reward system for workers. If it it is Byzantine and somewhat archaic, it may be a good idea to look at making changes that cause your reward system to be transparent.
Another really popular idea is to create employee recognition ideas, using them to reward employees and to counter the notion that equity theory compliance issues exist within your company. A good recognition idea will often restore equity among co-workers because it is transparent and fair.
Hiring the community: Although there is rarely a mandate that lets HR managers know that they must hire to match the demographic makeup of the local community's population, not paying attention to specific groups within the community can cause compliance issues down the road. For small businesses, they are normally exempt from most the regulations. Once you have a larger staff, however, it is a good idea to keep abreast of the challenges facing the local market. As an example, one challenge that has come up in the past is that the software industry in San Diego sits in a community that contains roughly 36 percent Hispanic workers. Yet the industry only has around 7 or 8 percent Hispanic employees. Instead of make the structural changes that they could make to hire more Hispanic people, they are largely maintaining the status quo.
For other companies that have been faced with this type of challenge and survived unscathed, it is normally a function of them recognizing the problem and taking tangible steps to try and close whatever gap exists between the people that they have and the population that they have.
It can be a delicate issue. One piece of advice is to not overcompensate when a problem has occurred. Several years ago, Sega had some complaints from their Filipino work staff. They felt they were being ignored when hiring decisions came up. Sega agreed to try and hire more people from the Filipino community. Unfortunately, although that worked for the Filipinos, it did not make other groups happy and so they began to complain to the company.
Overall, however, HR departments remain one of the most important parts of a small business. And within their role, overcoming compliance challenges for their firm is one of the stronger ways that they help contribute to the bottom line.