Did you know that most start-ups don’t have a ‘People Strategy’ when they set up the business?
The initial leadership team generally consists of Finance, Tech and Marketing but more often than not, HR is left for much later in the start-up journey. Yet, one of the key aspects of growing a start-up is growing the team i.e. hiring a team, ensuring they are productive and stay with the Company.
If you are a start-up entrepreneur, how would you define your starting point. Here are some questions to get the juices flowing:
What positions would you hire to? And what will they do? (Cue: Job Descriptions, Manpower Plan)
What will you pay them? (Cue: Compensation Strategy)
Why should people join your Company? (Cue: Culture, Benefits)
How would your team represent your brand? (Cue: Employer Branding)
And the list goes on…
Also, let’s talk numbers for a quick minute. Have you thought about?
How much time would you/your management team spend sourcing, screening, shortlisting 100’s of CV’s before you find the ‘one’? Is this time well spent?
How much $ would you lose if you chose the wrong ‘one’?
How would you assign a $ value to poor performance? Absenteeism? Etc.
I’m sure you get where I am going with this… Having HR at the table for any start-up is not a ‘nice-to-have’, it’s a ‘need-to-have’. And here’s why.
1. Employer Branding
One of the best ways to let the market know that you have arrived is to let your future employees know that you are in fact, serious about growing your brand and are willing to commit to a well formulated HR strategy to translate your vision into action. This does not happen by default, but by design and the right HR leader can lead this for you.
Just as much as you want customers to find your product or service, your future talent needs to know what you represent and offer. Hence being proactive and sparking an interest about your startup in a competitive job market can give you that competitive advantage. Remember that Employer Branding is a continuous process. It does not finish with mastering one aspect or when you have executed it to attract talent, very soon you need it more than ever to retain that very same talent as another start-up will emerge and may seem more attractive.
2. Getting The Right Team on Board
Talent is a commodity. The RIGHT talent is a unique commodity. The RIGHT talent for YOUR business further narrows that talent pool. Similar to marketing to your customers, you need the right recruitment strategy to ensure that your target audience i.e. potential employees have visibility of your efforts. Instagram has only 13 employees when it was bought by Facebook for $1billion dollars. You need a home run every time you hire.
Having the right team on board to represent your brand is critical to business growth. Working at a Start-Up is a unique experience sometimes filled with a lot of ambiguity and moving parts. Your team should be adaptable and agile to cope with both. The right team makes a difference when a start-up is being reviewed for further funding and investment. One of the key slides in a pitch deck is your team.
23% of start-ups fail because they did not have the right team. Mark Suster said it well when he said “Individuals don’t build great companies. Teams do!” Getting the right team is work and HR is uniquely positioned to develop a talent acquisition strategy that can not only fill vacancies but also measure its effectiveness and return on investment. The true cost of a bad hire is way more than you think.
3. Rewarding your Employees
A Start-Up’s success is known to depend on 3 groups of people: Founders, Investors and employees. There is a massive competition for talent in the market. Ensuring that the compensation package i.e. salary + benefits +perks you offer sets you apart from the competition. Entrepreneurs need to win at the workplace to win at the marketplace.
Many start-ups have used benefits as their main attraction through offering equity, flat structures, flexible work schedules, etc. Doing more of this nurtures trust and empowers everyone. However, employee benefits are a big overhead expense for start-ups, so ensuring that its funds well spent. This is where HR comes in.
4. Welcoming Your New Team On Board
Have you ever been to a restaurant or hotel where the host is completely un-prepared to receive you? They are scrambling to find your reservation, the tables have not been cleaned and the team are scurrying around to welcome you. No matter how hard they try to fix the service later, your first impression will most likely be rather disappointing. That is exactly how your new employees will feel if you are not well-prepared to on-board them. As employers, you have one chance to make a first impression. So make it a good one.
From having a work station to gathering documentation, a well thought out on-boarding plan demonstrates that you are keen to ensure the success of your new team. The right HR leader will help you do so by creating an exciting on-boarding experience that communicates your culture, values, vision etc. and ensures a truly welcoming experience for your new team.
5. Creating An Environment for Your New Team to be Successful
Culture eats strategy for breakfast! This applies to ANY work environment. Employees spend 8 – 10 hours of their day working for your business. It is prudent that you create a culture where strong performance is rewarded, average performance is encouraged to progress to strong performance and the learnings from poor performance are addressed appropriately.
According to a 2020 Job Seeker Nation Report, 81% of workers surveyed think that company culture is important for their decision to apply for a job. So, culture is critical to hiring and keeping the right team on-board.
HR are your eyes and ears on the ground. Not only will they help employers shape the culture, they will be able to provide a pulse of the organisation and provide continuous feedback on the sentiment of the people.
6. Legal Protection
Last, but certainly not least, HR ensures that the business is legally protected from an employer and employee perspective. Think about your exposure, whether in reputation or lawsuits, even if just one employee decides to bring you to court.
Lawsuits cost time and money and can be easily avoided by having the right HR leader to ensure legal compliance is weaved through all employment practices.
Remember, you need to be HR-ready as much as you are cash flow-ready to lead a successful Start-Up. If you are a Start-Up entrepreneur and are still not convinced, take our simple self-assessment tool to help you assess your current status. You are also welcome to speak with a member of our team to help you.
We wish you all the very best in your Start-Up journey and I look forward to seeing your business as the next unicorn!