When you run a business, the most valuable thing you have is your staff. Without your employees, it would be impossible to deliver excellent service to your clients, or for you to function at a high level as a leader. When it comes to managing your employees and having a mutually beneficial working relationship, the contract sets the tone. It isn’t just a document; it puts on paper how things will go, puts measures in place to avoid issuesand also means if the relationship doesn’t work out, the employer and employee can part ways peacefully.

Because contracts are so important, mistakes can be costly and have serious implications on the business. If they aren’t written well, this can leave loopholes that will cause problems down the line. Many businesses have made this mistake and found themselves with useless contracts that aren’t actionable or usable. Whether you run a business that outsources or hires remote employees, or you have people in-office, these are the top mistakes people make when it comes to their contracts. You’ll also learn about how to avoid these mistakes and streamline your contract systems.

No Clear KPIs 

Many business owners find themselves in a trap when an employee fails to do something, only to find out that there’s nothing on the contract regarding that action. Your employees can’t always guess what’s expected of them, unless it’s spelled out in the contract. If for example, you expect them to work over the weekend, but it was never stated in the contract they signed, that wouldn’t be fair.

The solution for this is to include the KPIs, metrics and expectations in the contract so that they know about it from the start. If you don’t provide this information, you’re setting them, and your whole working relationship up for failure.

Not Having a Reliable Management System

 Managing contracts via email, stacks of paper and Dropbox just doesn’t cut it. When you don’t have a unified contract management system, you are more likely to make mistakes, miss important details or lose track of things. Investing in contract management softwarewill make your business more efficient and productive. The right software will helpyou automate things that would otherwise be manual and time-consuming, allowing youto spend more time on aspects of your business that grow it and make it better.

 Not Collaborating With Other Departments

A contract isn’t just a piece of paper that stipulates how much someone will earn and how the working relationship will go. It also involves legal matters, things like healthcare and other details that can impact the employee or the organization. As a result, you should consult with your human resource and legal departments, and make sure every stipulation protects both you as the employer and the employee. If you don’t consult with these other key departments, you risk having a contract that could lead to legal issues if the working relationship doesn’t go well.

 Rushing the Process 

 A rushed contract is a setup for a huge disaster. A contract is a legal document, meaning it needs be written meticulously, every detail has tobe verified to make sure there are no loopholes, and it has to be read through and perfected down to the last period. When you’re compiling your contracts, give yourself time to do it right. You can also make it easier by using templates or software platforms that save time by coming up with the bones of the contract, so that you can customize it for your organization and the job in question.

Not Thinking of What’s Best For Your Employee

As much as a contract is meant to protect the organization, it shouldn’t be solely focused on it to where it doesn’t care about the employee. The working world has changed immensely and you now have Silicon Valley companies employing people who help keep the staff happy. You may not have to hire a happiness officer, but you can include things that make your employers happy in your contract. Happy employees produce better work, so think about that. Some companies give each staff member a paid health day off each week, a book allowance and other things that enhance their lives. Putting these things in your contract, and not just saying them will show the employer that you have their back, and that you care about them beyond their work product.

When it comes to your contracts, attention must be paid to details, key information and all the implications of every part of the document. You want your working relationship to start smoothly, run smoothly, and if things don’t go well, end as smoothly as possible. When you put in the time and effort to build a repeatable and predictable system for your hiring and contracts, you save time and headaches for yourself as a business owner. You also make it possible for employees to feel protected by the organization, which will win their loyalty.