Minimizing Recruitment Risks

Avoiding Costly — And Unnecessary — Hiring Mistakes in a Down Economy

With layoffs, downsizing and stressed-out employees, it is more important than ever for employers to fully grasp the legal aspects of hiring, managing and terminating workers. Hiring new employees is an important step for any company, but the work does not stop there. Employers need to consider the importance of hiring practices, tracking employee performance, the use of an employee handbook and areas of litigation, among other issues.

In 1966, singer-songwriter Stephen Stills wrote, “Paranoia strikes deep. Into your life it will creep.” Now, more than 40 years later, nowhere has paranoia crept deeper than in the hiring habits of today’s employers, who so live in fear that they may not be in compliance and become targets for litigation that they forget it’s their business. That should be the No. 1 priority.

This happens all the time. Instead of developing a process and a system to safeguard their company from lawsuits, business owners often end up relinquishing control of their company by focusing more on potential pitfalls than making sure they have hired the right employees. And after that, it’s often too late to prevent problems.

There are several reasons why this happens. First, is the high litigation potential that exists in today’s culture — everyone is looking to sue someone. Second, the government wants to tell business owners how to run their business, or at least that’s how it seems. On the surface, the government tells owners, “this is how it’s going to be.” But the government never really tells owners how to do it. That’s something business owners control. At some point, owners have to say to themselves, “It’s my business, and I am in the best position to know what’s best for it.”

That control, particularly when hiring new workers, is all about communication. Communication is what creates a healthy and safe working environment, while at the same time decreases both the need for termination and filing workers’ compensation claims.

For instance, an employer can make its first mistake when it hires a forklift driver and automatically assumes because it says on his résumé he drives a forklift that he knows everything about the job he is going to do. What he doesn’t know is the company, because the hiring manager never took the time to explain it. He doesn’t know the product, he doesn’t know the facility, he doesn’t know who are the company’s best clients, and he doesn’t really know what is expected of him.

That’s not all. The forklift driver doesn’t know (and the employer may not know, either) that he has been set up to fail because of a lack of communication. And with 80 percent to 90 percent of workplace injuries occurring within three months on a new job, the company has laid some pretty dangerous groundwork for workers’ compensation claims.

As another example, consider a company with more than 400 employees. The owner of the company made it a point to spend 30 minutes on the floor with each new employee to make certain he or she understood everything about their new job, and what was expected. As a result, there was a drop-off in terminations and job-related injuries.

Communication is also a key element when evaluating an employee’s performance. Unfortunately, for many employers this procedure takes on a bureaucratic quality in which evaluations are rigidly structured as formal reviews once a year or once every two years.

Evaluations actually should be conducted as often as possible. The manager should take the initiative to sit with an employee whenever possible to say, “This is how you do the job correctly.” It should be constructive criticism, and it should be verbal, not just written.

Time after time, however, the manager lacks the resolve to confront employees about their performance, to let them know if they are doing a good job or need to show improvement in certain areas. Then, a year later, the unsuspecting employees are handed a negative review that they never see coming, and they are out the door.

Suddenly, the company is missing a worker and is faced with having to start training a new employee all over again. Then, in the back of the owner’s mind is the lurking fear that the suddenly terminated and unhappy worker may be seeking legal options — all of which could have been avoided through proper communication.

Proper communication does not exist solely in an employee handbook. An employee handbook is not as important as many companies think it is; at best, it is overrated. Good management is all about open communication, not pages in a book that will probably sit in a drawer. In fact, very often it is the employee handbook that gets the employer in trouble.

For instance, California is an employment-at-will state, which means an employer can walk into an office tomorrow and fire any employee and never have to give a reason why.

Yet, companies will put things like the following in a handbook: “If you’re late one day you get a verbal warning, two days a written warning, and three days a termination notice.”

By putting such criteria in a handbook, the employer has taken the “employment-at-will” out of the mix. Such written terminology becomes “reasons” for termination. The employee now thinks there has to be a reason to be terminated, because it is all outlined in the employee handbook. This is dangerous water to be treading in because a handbook sets expectations that are not really necessary.

What is necessary when looking to avoid costly employment mistakes in a down economy, where workforces are getting leaner and every worker becomes increasingly valuable, is very simple — just good communication.

Topics Talent