During my law practice over the past twenty years, I have been active in many chambers of commerce as I provide legal services for businesses. While businesses leaders appear to be most vocal about taxes and regulation, what I actually detect to be the biggest vulnerability and one business owners can directly do something about is human resources.
Ironically, the single most valuable asset for all businesses is the people that operate it but the mishandling of the obtainment and retention of employees and the termination of the employment relationship too often results in the loss of time, energy, morale and money. Managing employees is becoming increasingly complicated. The area of human resources presents a gauntlet of state and federal legal issues which can be tricky to navigate. Maintaining a work force can present legal issues in an assortment of areas such as immigration and homeland security, fair labor standards, family medical leave, compensation and benefits, discrimination, trade secrets, confidentiality and non-competition.
Other attorneys have told me that for most companies, it is not whether, but rather when they will be faced with legal action by a present or former employee. Human Resources experts have identified many factors that may explain this increase, including an expansion of the employment laws, a greater awareness by employees of their rights under the law, and an increase in the number of attorneys who are willing to represent disgruntled employees.
I practice what I like to call preventive law. It is important to take a proactive approach to prevent lawsuits. Having a comprehensive and standardized system and plan in place to create a foundation from which a work force can grow is critical. Otherwise, it is difficult if not impossible to keep up with regulatory and legal requirements which are becoming more complex.
One watch word I use for my business clients is “system”. It is important to develop a system of hiring, review, and termination when necessary. Not treating every employee the same creates a morass of possible pitfalls. Develop good HR policies and review them for relevance and compliance with legal regulations periodically.
It is not just dotting the “I’s” and crossing the “T’s” legally which is important. Basic respect and a positive environment play a large role. While the people which operate a business are its greatest assets, they are more than assets like phones or computers. Finding ways to make employees feel a part of something and encouraging their growth goes a long way. However, if an employee does not work out, the manner of termination is critical. An employee is facing the loss of income and his or her feelings are often hurt. It is during this process and how it is handled where the most claims arise. Yes, Virginia is an employment at will state and perhaps an employee does not have a good legal claim but unfortunately, I have witnessed that the lack of a good legal claim has not kept a former employee from bringing suit. The business may win the law suit or have it thrown out altogether but the process will be expensive.
The decision to hire a work force involves not just the cost of salaries and benefits, but the time and effort to learn HR laws and concepts or obtain advice from HR professionals to build this most essential part of the business. It may run for a while without adequate care but the risk of a massive breakdown is lingering and truly, with building a productive happy workforce, an ounce of prevention is worth many pounds of cure.