What are employees?
Employees, contractors, subcontractors, free-lancers, or whatever you call the people that you pay money to in exchange for their services are all a form of the human capital of your business.
There’s a reason that your employees are called human capital. Hiring, training, paying, and possibly even firing team members is one of the most expensive parts of your business. (The second is usually providing them with health insurance!) However, just like any other form of capital, your human capital is something to be maintained, treasured, and protected so that you can maximize the benefit that you receive from it. However, it has to be maximized properly (and legally) and can't be exploited.
How can I protect my business from my employees?
Managing employees is a convoluted and messy process. You need to have clearly defined processes, goals, and strategies for dealing with internal conflict, for managing benefits packages, for hiring, for firing, and for all that happens in between. From the time you bring on your first employee or intern, you need to have certain agreements in place between you and your employee so you can start off the relationship with a clear definition of expectations and boundaries, and what happens when those expectations are not met or those boundaries crossed.
The first thing to think about is what you expect from your employees. This goes into the hours of work, the use of any company technology (computers, phones, televisions, POS systems, etc.), dress code, and interactions with co-workers and managers among others. You must also think about what boundaries are permissible, what company information is protected (client lists, project scopes, employee information, company processes, etc.), and how you want to defined and protect this company information.
What happens if I don't protect my business from my employees?
It's easy to forget that your employees see your company as a job, where you probably see it as a vocation. You expect your employees to show the same loyalty to the success of your company as you do, but that's unreasonable. Most likely your employees have no stake in the success or failure of your company or any single project other than they will need to find a new source of employment.
The biggest risks from poor employee management are law suits. They could be as sensational as a discrimination claim or as devastating as theft of company trade secrets. By failing to foresee problems and defining the resolution process beforehand, you're planning to spend a lot of money in defending against or prosecuting a future litigation.
How do my employee and internal procedures benefit me?
By laying the foundation of a good employee-employer relationship up-front, by defining expectations and boundaries, you can hold employees to set standards, you can protect your company from costly litigation, and you can fall back on the documentary safety-net that you built for yourself.
While you can't always guarantee that you'll avoid a lawsuit, an unemployment claim, or a worker's compensation claim, you can make a lot of headway to preventing unnecessary expenditures by laying the right legal and documentary foundation to protect yourself and your employees.