Many startups begin with an innovative, break-the-standards mindset, and it serves them well. Sometimes, though, this mindset means that startups neglect traditional business necessities like human resources.
Neglecting your HR strategy now will only open you up to risk, liability, and potential issues. Your company is probably not ready for a full-fledged HR department, or even one full-time HR employee, but that doesn’t mean that human resources shouldn’t be on your mind.
I’ve worked with many startup companies over the past several years, helping them identify their human resources needs and strategies. With all of the startups I’ve worked with, I’ve found that there are three primary areas that I think are most important for a business just starting out. These key steps are the foundational fundamentals that, if you get right the first time, will set the stage for the future.
1. Develop a Workforce Plan
The first HR foundation that startups shouldn’t neglect is developing a workforce plan. A workforce plan helps you decide when you need to hire people in roles throughout your company before you need them. A workforce plan allows you to “plan backward,” anticipating your company’s staffing needs before they’re dire. I’ve seen too many managers struggling with their employees simply because they made a hasty hire. Don’t make the mistake of hiring in a rush and paying for it down the line—use a workforce plan to ensure you have time to make a good selection.
2. Create an Employee Handbook
The second area for startups to consider is
You might be thinking, why would I need a handbook when I only have a couple of employees? No matter what size your company is, you should have an employee handbook. Even a business with only one employee falls under state, city, and even federal government employment laws that you should be aware of. Your employee handbook will outline any relevant regulations and laws, explain what and when you’ll pay your employees, and help you avoid any misunderstandings down the line. The employee handbook also protects you in situations of job performance problems.
3. Mitigate Risk
Even one employee can pose a significant risk to your company with a potential wrongful termination or discrimination lawsuit. One of the main functions of an HR professional is to help a company mitigate risks associated with employing people. That said, most startups aren’t ready to hire a fulltime HR professional, and I advise against that. You need to wait until your workforce is developed and larger so that you’re not hiring a highly-paid HR professional and then finding you don’t need them.
Instead, I recommend outsourcing your HR and bringing on an HR advisor. Startups don’t need fulltime help, so consider a service that can help you manage your employee relations on an as-needed basis.