Any company that wants to stay profitable and successful must be fully cognizant of the risks and liabilities that come with being in business and prioritize the task of minimizing them. Workforce management risks, in particular, can put you at a competitive disadvantage, hurt your bottom line, and damage your reputation. Regulatory non-compliance, tax fraud, misclassification, health and safety, administrative errors, payroll mistakes—all of these risks come with managing a workforce. Naturally, you should be doing everything you can to minimize or completely remove these risks.
Here are five keys to follow.
1. Identify the Risks
You cannot control risks that you don’t know about. The first step is to take a proactive approach to identifying any risks that you might be currently facing or might face in the future. Look at every aspect of your workforce management process—training, onboarding, paperwork, hiring and firing, payroll, contingent workers, etc. Review your procedures and determine if anything that you are doing while managing your workers might make you liable for any reason. Once you are fully aware of every risk, you can start planning processes to minimize them.
2. Document Everything
Everyone that is involved in handling employees should be documenting the processes and procedures that you are putting forth to minimize risks. This includes your managers, human resources personnel, administrative clerks, and payroll clerks.
Document the training sessions for health and safety. Make sure you’re creating and properly managing your employment contracts. Keep time sheets. Put any disciplinary action in writing.
Having the right paperwork to back you up can help you to protect your company down the line if a lawsuit, audit, or other issue comes up.
3. Know and Understand the Laws
By far your biggest risks will be legal in nature. To stay compliant, you need to know and understand all of the laws that pertain to your workforce. For example, if you use contingent workers, you must know how to differentiate them from your employees to avoid misclassification. Make sure you are managing and treating them as independent contractors, not employees.
Additionally, the laws for employment, health and safety, taxes and payroll, and other areas of managing a workforce may vary by state, organization size, and type of work performed, so make sure you are following all of the correct laws. This will significantly reduce your risk of making workforce management mistakes due to lack of knowledge. If in doubt, hire legal counsel.
4. Use Technology
Workforce management is becoming increasingly more complex. To stay on top of it, you should be using technology. A workforce management software program can help you stay compliant and minimize risks, while improving efficiencies and productivity. This type of software program can reduce the risk of administrative and paperwork errors significantly and also allow for greater visibility into business metrics to help you identify and reduce risks.
You will be able to control and schedule labor, increase staff communications, collect and store time and work data, manage tasks and activities, store employment contracts, track and measure performance, and pay your workers seamlessly. When you automate the process of managing your employees, you can not only drive cost and time savings, but you can also gain valuable insights that can help you reduce risks.
5. Engage an Expert
Workforce management is a lot of work. It’s time consuming and it’s complex. A lot can go wrong and you might not even realize it until it’s too late. The best way to minimize your risks of managing employees is to take advantage of the services of an expert. From procurement and onboarding to compliance and payroll, a workforce management expert can identify old and new risks, create customized solutions to help you minimize them, and ensure ongoing compliance. You can either hire a consultant for a one-time assessment or outsource your workforce management on a long-term basis.