.png){kind=small}
HR Mistakes That Could Cost You Your Business
- Denita Minnis
- Jul 31
- 3 min read
Introduction:
When people think about what can cause a business to fail, they often point to poor sales, bad marketing strategies, or a lack of funding. Rarely does the conversation begin with human resources. But the truth is, HR missteps-big or small, can quietly dismantle a company from the inside out. Whether it’s a startup with a small team or a growing business on the brink of expansion, human resources practices matter.
At James Montine Professional Services Group, we’ve worked with many entrepreneurs and business owners who were shocked to discover that their HR errors, not their business model, were the root cause of their challenges. In this blog, we’ll cover the most common HR mistakes that could cost you your business, how to avoid them, and how we can help safeguard your success.
Top HR Mistakes to Avoid:
Improper Hiring Practices
Hiring the wrong person can cost you time, money, and morale. Many small businesses skip structured hiring processes, background checks, or fail to define job roles clearly. This often results in turnover, team dysfunction, or worse… legal trouble.
Action Step: Create a standard hiring process that includes job descriptions, structured interviews, and reference checks. Use tools or consultants to support talent screening.
Failure to Comply with Employment Laws
Employment laws change frequently and vary by state. Failing to comply with wage laws, discrimination policies, or required documentation (such as I-9 forms) can lead to audits, fines, and lawsuits.
Action Step: Conduct a quarterly HR compliance check. Partner with an HR consultant to keep policies current and aligned with state and federal laws.
Lack of Employee Documentation
Verbal agreements or undocumented warnings often leave employers vulnerable during disputes. Without proper documentation, you could find yourself powerless in situations involving disciplinary action or termination.
Action Step: Keep written records of all employee interactions, including performance reviews, disciplinary actions, and promotions.
Inadequate Training and Onboarding
Throwing a new hire into the deep end without proper onboarding leads to confusion, poor performance, and low retention. Similarly, failing to train employees on safety, software, or company procedures increases risk.
Action Step: Develop a clear onboarding plan for new hires and schedule regular training sessions for existing employees. Document all training efforts.
Ignoring Workplace Culture and Morale
A toxic workplace culture or ongoing morale issues can lead to high turnover, low productivity, and reputational damage. Ignoring employee feedback or not addressing internal conflict sends a message that leadership isn’t listening.
Action Step: Conduct anonymous employee surveys, host team-building events, and address concerns promptly. Build a culture that promotes respect, inclusion, and growth.
How to Protect Your Business:
Avoiding these HR mistakes starts with being proactive, not reactive. Here are five things you can do right now:
Audit your current HR policies and procedures.
Schedule an HR consultation with a certified expert.
Train your leadership team on compliance and team management.
Establish clear employee expectations and document everything.
Invest in HR software or professional support if you don’t have an internal HR team.
Final Thoughts: How We Can Help
At James Montine Professional Services Group, we specialize in helping entrepreneurs and struggling business owners avoid common pitfalls that lead to closure. Our HR Services Review is one of our most in-demand offerings, providing business owners with a full diagnostic of their HR practices, compliance status, and documentation procedures.
Whether you’re just getting started or trying to course-correct, we help you put the right people, processes, and protections in place. From team-building strategies to leadership development courses, our mission is to equip you with the tools you need to grow sustainably and confidently.
Don’t wait until it’s too late. Contact us today for a free consultation and find out how we can help you protect what you’ve worked so hard to build.