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The 5 Most Common HR Nightmares & How to Avoid Them

Disengaged employees. A toxic culture. Errors on paystubs. As an HR professional, you’re bound to encounter some haunting moments that keep you up at night.

Luckily, there are steps you can take to get ahead of these scary scenarios.

Let’s take a closer look at 5 of the most common HR nightmares and how to avoid them:

1. Discrimination & Harassment Issues

HR’s goal is to provide every employee with a safe and healthy work environment. When faced with employee misconduct issues such as workplace discrimination or harassment, even the most sensible HR practitioner can feel vulnerable or uncertain.

To protect your employees, it’s important (and legally required) to respond appropriately to workplace complaints, bullying, and discrimination. Ensure you have optimized policies and procedures in place to deal with complaints when they come up. Managers must be thoroughly educated and trained so that they know how to properly respond to any complaints they receive from employees.

Keep in mind that the right compliance solution can help guide your corporate response to these challenging situations. For example, with Namely’s anonymous reporting tool Tell Us, employees can submit reports anonymously 24/7. The platform enables security, proper documentation for anti-harassment governance, and consistent compliance with workplace regulations.

2. Payroll Processing Errors

For HR teams, paying employees accurately and on time is a top priority. However, when manually processing payroll, errors are inevitable. Whether it’s underpaying or overpaying employees, entering payroll data into spreadsheets can lead to calculation errors and inaccuracy.

Thankfully, payroll automation can help you avoid this. With a payroll system, your employees’ pay stubs will always accurately reflect the hours they’ve worked. Since this software syncs with their timesheets, you know you’re paying overtime employees correctly across state lines. Payroll automation also streamlines tax filing, processes wage garnishments accurately, makes it easier to update employee information, and saves time on reporting.

3. Mismanaging Benefits

From medical insurance to EAPs, employees and their families depend on benefits—which is why mismanaging them can be a nightmare for everyone. The first step to avoiding this is to find out what benefits matter most to your employees. By surveying them, you can get a pulse on how they feel about your current offering and what benefits they wish they had.

After using this insight to craft your benefits package, it’s crucial to educate your employees about any changes you’ve made. Host virtual benefits fairs, “office hours”, and informational sessions to make sure that they are fully aware of all their options. 

Managing your benefits properly doesn’t stop there. Running open enrollment can be full of nightmares alone. That’s where benefits administration software comes in. Using intuitive technology can make it a breeze for both managers to run open enrollment and employees to enroll in their benefits.

4. Worker Misclassification

It may seem rather simple to classify workers as employees or independent contractors, but doing this incorrectly can be costly for your business. Employers can incur serious penalties when it comes to taxes, withholdings, and overtime wages. Misclassified employees can also be denied critical benefits and protections, including family and medical leave, or sick and paid vacation time. 

Employers should understand the categories of worker classification and national standards set by the federal government—like whether the employer has control over the individual’s work and provides him or her with the materials or tools needed to complete that work.

To prevent any errors with misclassification, it’s helpful to partner with an HRIS solution that streamlines your employee data in one centralized location and helps avoid manual error.

5. Losing Top Talent

In today’s hyper-competitive job market, many companies are worried about losing their top performing talent and struggling to retain them. High turnover can negatively impact employee morale, company culture, productivity, and overall business performance. 

Offering strong compensation, attractive benefits and perks, flexibility, and recognition can help you attract employees by meeting their needs during these challenging times. Technology also plays a major role in building a positive company culture in a hybrid or remote working environment. Explore virtual collaboration and employee engagement tools to maintain morale and uphold company values.  

An engaging HR platform is a great way for employees to interact and connect with each other virtually, from anywhere, at any time. For instance, Namely’s social media-like news feed encourages employees to celebrate each other’s birthdays, work anniversaries, and appreciate their colleagues.


Fortunately, these nightmares can usually be avoided if you’re proactive. But sometimes in the world of HR, you can expect the unexpected to happen. To read more about HR’s scariest moments, check out these 5 True HR Horror Stories.

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