Small Businesses Can Drastically Limit Exposure by Having an HR Audit Performed

By Michael Sullivan | Posted September 7, 2018

Many Small Businesses have a Risk that they may not even realize: Liability from not having someone on staff with real Human Resource and Employment Law knowledge. Many Small Business Owners without a Human Resource Professional either:
1) try to handle Human Resource issues themselves or
2) delegate those functions to some Management person who also does not have Human Resources training.

Both of these options can create liability for the organization.

Employment Law is a complicated thing with many nuances. Handling situations “as per usual” can create significant liability because the playing field in which businesses operate today is becoming more complicated. We live in a very Litigious Society in which Employees often view themselves as Victims when a situation occurs where they do not benefit from an action or inaction an organization may take.

On any day it is unusual if there is not news story regarding Discrimination, Harassment or Sexual Harassment or Unfair Treatment charges made by an employee against their employer.

The problem is Today Communication is Immediate, whether it be social media, television, radio or newspaper.

There are numerous Employment Laws in place to protect employees or candidates for employment from actions taken by employers.
This can result in Law Suits or even Government Investigations.

Once an Employee makes a Charge, it potentially could be immediately made known to the public. Unfortunately any employee can make a charge of some form of mistreatment, regardless whether the charge has any basis in truth. Additionally, once a charge is made it does not just go away, it must be defended against.
That can result in:
1) Time Burden required of organizational management, which would normally is focused on running the business
2) Financial Resources needing to be diverted from the operation to legally defend against the allegations
3) The potential Risks of Damage to the Organizations Reputation and associated potential results of Loss of Clients Existing or Potential Clients

What can Small Businesses who cannot afford to have a skilled and trained HR Professional on staff do to limit liability? The easiest and least expensive way is to hire a Seasoned HR Professional to conduct an HR Audit. Doing this will identify potential Areas of Risk and offer remedies on how to limit that liability.

Usually, addressing the major areas of liability identified can drastically decrease the exposure small organizations face on a day to day basis.

Yes, hiring proven HR Professionals to conduct the audit and address the most pressing issues found will result in some expense but, when compared to both the financial exposure, lost management time and potential reputation damage, those costs are negligible.

It only takes one wrong decision by management and major liability and exposure can be the result.