HR Debt: How It Builds Up and How to Pay It Down

Explore the sources, causes, impacts and recommendations on HR debt. Causes explored are poor processes, lack of useful HR data and poor communication. Impacts include loss of productivity, employee turnover and negative impact on employee morale.

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HR debt can occur when companies skip the critical work of creating and implementing important processes, such as standardized hiring procedures, comprehensive onboarding programs and consistent performance management systems. When these foundational elements are neglected, problems can build up over time, leading to significant organizational inefficiencies and challenges.

One major consequence of accumulating HR debt is the increased risk and exposure to claims and costs. Without well-defined policies and procedures, companies are more vulnerable to legal issues, compliance breaches and employee grievances. This can result in costly litigation, fines and settlements that could have been avoided with proper HR practices in place. Additionally, the lack of clear guidelines and support for employees can lead to decreased job satisfaction and morale, which can in turn affect overall productivity and workplace harmony.

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Jacqueline Breslin
Executive Director, Client HR Consulting Services, TriNet
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Rob Maresca
Lead HR Compliance Consultant, TriNet
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Mayer Dallal, Managing Director, MBANC

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