How to do human resources right for start-ups
If you ask any entrepreneur to describe his business in three words, you can expect that "innovation" will be at the top of the list. It's a desired quality in startups since inventive ones constantly seek new and effective methods to challenge the status quo.
Although many small businesses might not perceive the need for an HR department, it's an essential and valuable asset at your organisation, especially if you want to grow. Putting an HR department a priority early on will not only help your business stay structured as it expands, but it can also address any internal problems that inevitably arise at unexpected times.
Understanding HR's small but vital role in startups
Throughout the life cycle of the business, HR for startups serves as a strategic business partner. Assuming that a company's performance mainly depends on how its human resources department addresses more considerable organisational challenges makes sense.
Founders of startups and their first employees need to be adept multitaskers who are prepared to take on any responsibility. Now, it is possible to give HR tasks to other departments like operations or finance. However, when a firm expands, the founders can decide to hire a talented HR team.
HR's role in startups
- Organisational structure: To whom will each employee report? What will the teams' and sub-teams organisational structure be?
- Benefits and compensation: What is appropriate and fair in terms of salary? What standards should we apply to choose what we should provide?
- Recruitment & hiring: How will we find exceptional new candidates? How will we get them onboard? How can we make sure they have the best possibility of success?
- Safety, health, and compliance: Although these can appear intimidating, they are essential. How do you ensure you and your coworkers are safe legally and physically?
- Workplace relations: Are your staff members happy? Who is there to represent their needs?
- Training, development, and performance management: While the organisation employs them, are employees growing and evolving at the correct rate for their personal and business goals?
HR checklist for growing businesses
Human resource professionals can choose what to prioritise based on your startup's goal, direction, and compliance needs. Human resources are the only organisation that can help startups instil their brand strategy in their staff.
1. Streamline your organisation
Your business doesn't need a detailed organisational plan when it first sets out, but you need a basic structure and operating plan for your HR department. This strategy will serve as a roadmap as your business grows and assist you in building your HR department.
2. Establish recruitment and onboarding processes
You must consider recruiting practices, regardless of your business size. This covers where to place your employment ads, how to identify your ideal candidates, and how to set up the onboarding process. Make sure you have the required papers available for them, whether it's your first employee or your 40th. This includes the following:
- Payroll employee information
- Equity documents
- Workplace verification
- Any contracts of employment (non-compete, intellectual property, etc.)
- Offer letter
Consider your onboarding procedure for new workers and the necessary paperwork. A smooth onboarding process sets your employees up for success right away.
On their first day, ensure you are prepared and take advantage of the opportunity to set expectations and explain goals. During the first few months of their employment, check in with your employees frequently and keep lines of communication open.
3. Establish benefits and compensation
After developing your hiring process, you'll want to learn how to retain employees for the long term. You may get there by ensuring your business creates competitive pay and benefits. Decide on your pay structure, vacation and sick leave processes, retirement benefits, and the technology you'll implement to manage payroll before creating these programs.
- Payroll management software
Numerous payroll management tools are available. Do your homework to get the best management system to meet your company's demands, as fixing payroll errors can be costly.
- Payment scheme
Based on market analysis, settle on a company pay structure that is both fair and competitive.
- Benefits and compensation
Some benefits are elective, while others are mandated by law. Medical, dental, vision, life insurance, and retirement funds are voluntary benefits. Employees' compensation, unemployment insurance, and disability insurance are just a few examples of mandatory benefits that can differ from state to state.
4. Outline compliance, safety, and health regulations
Ensure that your workplace complies with local and federal rules and is safe for employees. Your business is legally protected if your HR department is dedicated to making sure that your workplace adheres to Fair Work compliance, safety, and health.
Regulations frequently change, so having a professional HR staff on your side can help you stay in accordance with state and local laws.
5. Keep employee relationships strong
There are times when employees file grievances. In any circumstance, the best course of action is to have defined policies to deal with disputes. Outlining your company's code of conduct, coming up with a solution for any problems, and putting in place a way to gather employee feedback can help you be ready to respond to any employee complaints.
To keep connections solid, you should answer employee problems and engage employees personally. Once a year is not going to cut it when it comes to follow-up, and if employee satisfaction and engagement are not taken into account, you will have a dissatisfied workforce.
Employees must understand their roles within the company, find meaning in their job, and develop the skills necessary to accomplish their tasks.
6. Create training initiatives and methods for performance management
Employee training and performance evaluation may not be your top focus while your new business is just getting off the ground. Making sure you are allowing employees to improve their abilities and giving them timely feedback for growth is crucial to setting up an HR department.
Keeping personnel records and setting up a process for performance reviews will help with this. If left unaddressed, a lack of employee training can cause poor performance, staff turnover and harm your industry's relevance.
7. Be ready for audits
The fact that you will eventually be audited is another crucial factor to bear in mind when drafting your HR policy. Your HR department should identify areas to monitor and verify for compliance before that occurs and ensure they meet the needs of managers and employees. These areas may include:
- Company guidelines
- Wage structure
- Training and orientation
- Recruitment
- Benefits
- Payroll
- Workplace relations
Final thoughts
You'll be ready to dive in and start building an HR department from scratch if you follow our HR department starting checklist. Focus on small successes first and let your HR department follow through to win the trust of employees, managers, and leaders, even when the task may seem overwhelming and the demands high.
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