When you started your small business, you were so focused on taking your business live and growing it that you might have thought registering with the state tax authority completed your obligations. You may have had no idea that there were dozens of other business regulations pertaining to your venture. Then, the moment you hired your first employee you entered a whole other world of legal and compliance risk. Not knowing however, is not a successful defense for violations. Hopefully, you were able to work closely with a trusted advisor.
Here are several suggestions to help minimize and manage business risk:
- Get educated and get help. Sanctions, fines even criminal penalties can be assessed for violation of any number of laws and regulations governing small and medium sized businesses. Professional compliance support like that available through Insperity, will ensure you understand and remain compliant with these laws.
- Establish a strong foundation. As I have said so many times, “Good culture is the key to business success”. Establishing a strong and positive culture which values all people, especially employees, will prevent many problems. An emphasis on integrity and commitment to legal and ethical behavior will avert most legal complications.
- Develop and publish an Employee Handbook. Unheard complaints are at the root of most employee disputes. Your handbook should clearly explain your open door and retribution-free communications processes designed to calm mounting discontent and settle grievances. It should unmistakably define escalation channels and appeals.
- Require liability management training. Compliance failures often stem from ignorance of HR policies or regulations. Every leader, supervisor and employee should be regularly trained in and reminded of compliant and ethical behavior.
- Follow sound hiring practices. Avoiding bad hires is essential to creating high performing organizations and steering clear of legal jeopardy. Disrupters and non-performers are difficult to manage. They’re also most likely to file a wrongful termination suit when you have finally had enough. Careful and disciplined hiring methods help avoid this compounding risk.
Not every employment and business threat can be eliminated, but there are preemptive actions that can be taken. An annual risk assessment is an effective early warning system to identify issues, reduce risks, and minimize exposure.
For more information on managing compliance risks, get the book: Paul Sarvadi, (2019) Take Care of Your People, The Enlightened CEO’s Guide to Business Success, ForbesBooks.