Why HR Should be One of the First Hires in a Start-up
When starting up, one goes about hiring CTO, Sales Head, Product head and so on and many a times hiring someone in Human Resources function or as part of executive committee is just an after thought. At the critical juncture of scaling up you would often hear statements like “There is no value addition HR does”, “I have done all that HR does and more, we don’t need to hire anyone for HR” and so on.
So why should HR be one of the first hires and not after let’ssay 50/100/500 employees have joined in?
1. Freeing up CEO’s time: Nothing can be more important than this. CEO dons the role of HR expert when the organisation starts right from hiring, making compensation decisions to engaging people. You would want someone as competent as a Founder/CEO to take care of this.
2. Hiring: More often than not your initial hires are in the Senior Management those next in line. If you don’t have a HR team you have to hire a Recruitment consulting firm and end up spending a fortune. Your own HR team will be much better brand ambassadors of your culture than what a recruitment consultant can ever be. Wrong hire could be a Make /break in an organisation and HR could play a pivotal role in ensuring one hires right.
3. Culture: Culture more often than not stems from Senior Management and first 50-100 hires define how culture in the organisation is defined in the long run as well. It is not about having fancy offices, ping-pong tables or beer bashes. What actually is required is Engaging people, creating a shared vision, ensuring that the organisation grows at a rapid pace ethically requires having the right culture as one of central pillars. One would need to be really cautious when the organisation is at nascent stages and ensure HR is ingrained in hiring decisions, culture building.
4.Employer Branding: The first thing when someone looks at when they are looking to apply to an organisation is their Linkedin/Glassdoor pages. Creating an Employer Brand Internally and showcasing to external world goes a long way in engaging the internal people and attracting great talent. You need someone to hold this piece together for you.
5.Compliances (Employment related): This is often a neglected area, however it can be a make/ break for your organisation and your brand.
6.Learning and development and Talent Management: These are often the areas which receive the least importance in a start-up as everyone has their hands full in the daily rigmarole. Identifying the areas where skills have to be improved, ensuring that your star performers are engaged, growing and not leaving you is very crucial in a start-up.
7.And much more: Compensation decisions, Diversity and Inclusion, Benchmarking, Handling Employee concerns, Performance appraisals, Improving Productivity of people; All of these are critical in an organisation. For many of these issues you might not be able to reach out to your manager/colleague. You need an employee advocate and HR can add immense value playing this role.
"Uber and Snapchat did not have someone in HR for long after they started off and we have heard about the internal turmoil and fault-lines in culture"
While you are doing all of this; there are two points that Founders/CEO often miss
a. Hire a competent HR professional; no point in hiring someone mediocre or someone who is not capable of relating to the business
b. If CEO/Founders themselves do not value HR enough, others in Senior management and the organisation won’t value them and at the end of day; HR function would end up being an operational function and not of much strategic importance.
c. Far worse is when HR function is asked to be a tight control function whose major KRA is to control bottom line (employee costs) even if it means negative effect on Employee morale. It is portrayed that HR function is responsible for all the decisions and others in Senior management do not take shared responsibility. In such a scenario it is rarely possible for HR function to bounce back from negative image and be an Employee advocate. It is necessary for everyone in Senior management to constantly communicate to every one in the organisation - Why certain decisions are being taken, Why it is necessary for survival of the organisation and how it benefits organisation in the long run.
Uber and Snapchat did not have someone in HR for long after they started off and we have heard about the internal turmoil and fault-lines in culture. While there could be arguments that it is not a direct causality, one is left to wonder if situation could have been different if there was someone responsible to ensure the right culture was in place from the beginning. To summarise, there is a strong case for HR to be one of the first few hires in a organisation.