3 Tips to Protect Your Company -- from Its Own People
Surely you’re thinking about risk from your competition.
And most likely you’re thinking about pricing risk from increased costs or changing regulations.
But what about the risk within your own walls? The risk from your own people?
It turns out that one of the greatest risks to not just the profitability and growth of your business, but to your company’s survival, are the actions of your employees. Whether you currently have employees or plan to have some in the future, proactively minimizing these risks is essential to business success
Over years of senior management responsibility I've found three human resources policies to be of great importance in minimizing the risk that your employees can cause your business.
1. Write an Employee Handbook
It's not just about how many vacation days your workers get. Employee handbooks define guidelines for your employees and policies for your business. The employee handbook should spell out the expectations of how employees are to conduct themselves, both within your office and when dealing with customers. When it comes time to let one of your employees go, having a well-documented employee handbook will make things much easier and help minimize any ambiguity.
Sure, your company is most likely located in an employment-at-will state. But that won't keep a disgruntled former employee from filing a discrimination claim or other wrongful termination suit. Here's how an employee handbook can help your defense in such a situation:
- Require new hires to sign a letter verifying they have read the handbook, agree to the policies, and are aware that violating the terms of the handbook could lead to termination.
- Include in the handbook a clearly written process explaining how violations are handled, including written notices.
- Any time one of your employees violates a policy, write them up and keep this "reprimand" in their file.
If you follow these three steps and have sufficient written documentation to support the employee's termination, this due diligence will go a long way toward backing your claim that the employee was let go for the right reasons.
2. Sexual Harassment Training
Nothing can derail your business like a sexual harassment suit, and too many business owners do absolutely nothing to protect against them. One of the best things you can do is to set an early precedent within your company that such behavior is not acceptable.
For starters, your employee handbook should have a detailed section on sexual harassment, the types of behaviors that are considered unacceptable, and a clear statement that such behavior will be looked upon with zero tolerance. But this is not enough.
To really put teeth into it, you need a semi-regular program that reinforces the company's policy. There are many online training programs available that allow your employees to log in, read the required materials, and take quizzes certifying that they understand the company's stance on sexual harassment.
"Hostile work environments" are often the claim made by employees against the employer in these circumstances. Having a strong program in place will show the courts that you in no way fostered such a situation. On the other hand, if you do nothing to proactively protect against hostile work environments, you may not have much of a leg to stand on and could eventually be forced into a settlement -- or worse.
3. Anti-Kickback Policy
A kickback is when an employee receives compensation from a vendor in exchange for preferable treatment or contracts. Although not always technically illegal, kickbacks can still cause tremendous damage to your business.
Kickbacks result in higher costs, unethical practices within your business, potential for damaged customer relationships, strained vendor relationships, potential government interference in yourbusiness, and even jail time for offenders. To avoid these consequences for your business, be clear with your employees that kickbacks are not acceptable, and if they engage in this practice, they will be fired.
The way to do it is with an anti-kickback policy. (Click here for a sample anti-kickback policy.) By using this brief policy as a part of your employee handbook, you're setting the tone for your organization. Update it once a year, and require employees to sign a copy of eachnew version. That reinforces the policy and reminds everyone how serious you are.
These three measures-- a well thought out employee handbook, sexual harassment training programs, and a no-kickback policy -- will greatly minimize your exposure to employee wrongdoing.
Josh Turner is the founder of Gateway CFO Solutions, a St. Louis based firm specializing in helping small business owners reach their profit potential. GatewayCFO.com offers free resources and tutorials for business owners to improve their financial performance, outsourced or part-time CFO services, and is the home of the Gateway to Profits showfeaturing expert interviews and business analysis. Josh has served as Chief Financial Officer for companies in a variety of industries, from startups to mature, stable businesses. He is currently giving away his how-to ebook "Cash Flow Clarity: Be Proactive, Make Life Easier, Make More Money." Get your copy here.
