As a SaaS founder, a hundred tasks are bound to occupy your mind on a daily basis. We’re willing to bet that Human Resources isn’t one of them – but here’s why it should be.
Few start-ups adopt an HR structure in their early stages. For a while they might function without one, especially if the founder is the company.
There comes a point in any successful business, however, when it’s time to grow.
Growth usually entails on-boarding new people, who will bring exciting fresh ideas and personalities to the table. For the cacophony of new voices to come together in harmony, they will need a guiding process and structure as scaffolding for the business you are building together.
This process is not reserved for the corporate world; the earlier appropriate HR processes are implemented, the greater the chances are that the company’s vision will retain its integrity at scale.
A common misconception about HR sees the department’s raison-d’etre as resolving problems and complaints, handling policy questions, renegotiating contracts and so forth. While these are some of its key tasks, this model is reduced to being merely reactive.
In reality, the potential is far greater than that. Proactive HR seizes the opportunity to shape your company from the ground up, solidify its mission, and set the tone for the values and dynamics you hope to nurture.
And if you need some extra help, Humareso is an award-winning global human resources consulting firm focusing on the strategic and tactical needs of organizations. Reach out to John Baldino for more info!
By the way, we’re running a free trial here at Baremetrics at the moment. Nothing gives you more time to focus on things like HR than having a system for getting insights in your key business metrics. If you’re looking for in-depth metrics, sign up here.
HR in Today’s Startup World
As holds true for most things, a problem avoided is better than a problem solved. Taking the time at the start to set down healthy boundaries, clarify roles and set positive expectations will undoubtedly help sidestep a plethora of interpersonal issues in the future.
Adding a whole new task to your already-overflowing to-do list might seem daunting. But don’t worry. We've got you covered with these 5 Tips for Handling HR as a Start Up:
It’s never too early to start building a Human Resources protocol.
Whether you’re tackling HR internally or through an external consultant, there are great options available to help you navigate all stages of growth.
Plan your hiring process long before adding people to the team. If you intend to ask for seed money, you will be required to pitch a 1-3 year business plan. For most companies, this plan will involve bringing on new people. Demonstrating a realistic grasp of the needs and financial liabilities of employees is crucial in gaining the trust of a third party.
Proactivity and good organisation is also the key to avoid common hiring pitfalls that could lead to catastrophic consequences. More on that under Tip 3.
Hire in a way that makes sense for your company
You possess a unique opportunity, right at the birth of a start-up, to decide which values to cultivate.
Your first hires in particular set the tone from that point on. Throughout the company’s growth, these first stage dynamics will be replicated at scale, along with any unresolved issues.
First, focus on finding the right people for your company. In HR terms, this means identifying candidates who are of the right fabric but not necessarily an exact fit. In a small company, someone with a unique perspective is likely to contribute more meaningful ideas than someone who aligns perfectly with the rest of the team. So how do you find the right person?
Second, treat the people you bring on board as assets who can transform your company. No one wants to simply fill a gap. According to Lensa, broad interview questions such as ‘‘show me a project you’re proud of’’ are a great way to really get to know the person you’re considering. An approach like this will help you see if they’d be the kind of asset your company is looking for.
The more you invest in the people you hire, the more they will be invested in the success of your company!
Third, hiring doesn’t necessarily equate with growth. Over-hiring can actually eat your growth. Before you bring someone new on board, ask yourself carefully whether you really need someone full time, or if a consulting arrangement might add more value.
Be sure to check in with HR on your local employment regulations though – more on this with our next tip.
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Don’t assume and get help where you need it
Employment contracts are a minefield. The sooner you accept that “whatever ought to be right, probably isn’t”, the sooner you can get it done right.
Few things run the risk of costing a company more than discovering that the terms of their contracts are unlawful. Every business needs a crystal clear understanding of what is legal in the place of hiring, or they could face hefty fines, back-pay on benefits, and even have assets frozen.
When hiring abroad, assuming that your legal framework applies universally is an extremely costly mistake to make. Some common terms of American employment contracts are actually wholly illegal in many foreign countries.
European employees, for instance, don’t work ‘at will’, and are entitled to severance pay. Little distinction is made between consultants and employees in terms of workers’ rights and benefits, unlike their stateside equivalents.
Even within the US, state laws vary wildly, particularly in relation to 0-hour contracts.
Let’s say you signed an agreement with a part-time consultant. Regardless of what the contract says, if a court deems that the de-facto work conditions determine that the consultant is actually an employee, that contractor is now entitled to full employee benefits.
Legal and HR consulting not only keep track of the necessary hiring-and-firing paperwork, but also make sure that as a busy founder, you won’t make a potentially bankrupting-level mistake in the process.
Communicate clear expectations and make realistic promises
Hiring isn’t just about a company’s needs. It should equally consider what employees can gain under your employ. Joining a start-up is risky, offers less job security than large corporations, and usually includes fewer benefits. So why work for you?
People who choose to join a start-up generally identify with the company’s ideals and objectives on a personal level. If you’re going to attract and retain the right people, you must speak compellingly about the company’s mission, vision, and values.
Clear communication is also fundamental in establishing what the company expects from its employees. With fair boundaries set out unequivocally in the on-boarding paperwork, issues of poor work quality and rule-bending are far less likely to occur in the future.
On the flipside, the company makes certain promises to employees. These must be honest, realistic and concrete. Ethereal or unrealistic promises about a distant future will only frustrate the people working for you, possibly compelling them to slack or quit.
Stick to precise statements such as, ‘’I can promise health benefits in six months, but it’ll take two years before I can offer 401(k)’’, and deliver on those plans.
As a founder, making grand and unrealistic promises will only add further stress to you in the long run. Keeping those commitments small, practical and delivered on in frequent intervals is a much better way to inspire trust and avoid burnout.
If you need advice on what benefits you might realistically offer employees, consulting HR is a great place to start.
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Problem-solving with deep listening
Imagine this. Despite following these steps, somewhere along the way the wires got crossed. You have a disgruntled employee who is underperforming, or even threatening to leave the company entirely.
First of all, breathe. It happens. And HR is there to help.
As a start-up, you have the opportunity to really listen.
The first reflex of a lot of founders is to either jump on the solution themselves, or want to coach the team on how to fix it.
But when an employee is raising concerns, the resolution really comes in two parts:
- Fix the problem area
- Address any underlying fears that have come to the surface
Let’s say an employee raises concerns about the upcoming pitch for seed money. The problem-oriented response would be to further develop the pitch by researching the competition, improve the presentation and so forth.
Listening to the subtext could also reveal that this employee is concerned about their job security. The solution to this problem might have nothing to do with the pitch whatsoever, but rather with them questioning the longevity of their role in the company for instance.
As a start-up, your team is your company – their success is your success, and vice versa. Developing trust and security through open conversations is fundamental to cultivating a positive work culture.
And at the end of the day, that’s what Human Resources is all about: providing companies and employees the tools they need to achieve their highest potential together.
If you're looking to take your company’s HR to the next level, reach out to John Baldino and the team at Humareso for a consultation today.
For insights into your business metrics, check out the free Baremetrics trial here.