Guest post by James Burbank, editor in chief at BizzMarkBlog
When one first starts considering the combination of startups and HR, it feels a bit off. On one side, you have these agile, tiny companies where there is very little hierarchy and structure and on the other, you have this crusty old practice where boring HR representatives (thank you American The Office) waste everyone's time in large corporations.
At least these are the stereotypes.
Neither of these stereotypes has very much to do with the state of things these days. For one, startup owners are starting to realize that being too "startuppy" can be a bad thing. Also, HR management has gone a long way in the last ten years or so and it has become something no company should neglect if they wish success.
Employees as Startup Assets
There is probably no way to measure this or put it in numbers, but very few will argue when you say the people are a much more valuable asset for startups than they are for bigger, more established companies. More often than not, the people are the only asset a startup has at its disposal; people who are willing to put in 16-hour days from "the comfort" of their own bedrooms just so they can create a product or a service that might one day become a financially viable product.
In an average startup, most employees will be handling a couple of tasks, every one as critical as the last one. In such a situation, if an employee decides to leave (the ultimate negative HR outcome), it is a bona fide disaster. Most startups have a very unique way of doing things, especially in the early days, and trying to "plug in" another person in the same slot usually takes a lot of time and effort.
Even as the startup grows and new people are onboarded, startup employees still hold far more value than those working for a company that has been around for ten years and that already has a hundred people working for it.
How HR Helps
Before we go any further, it should probably be pointed out that the HR practices that startups can afford (time, budget and expertise-wise) will be a compromise-heavy version of the best practices. Namely, the vast majority of startups will not be able to hire HR managers early on and this is something that will have to be handled by owners and early managerial staff.
Nonetheless, there is still a lot that can be done.
For one, relatively established positive HR policies will minimize the chances of overwork becoming a breakdown issue. Some level of super-hard work has to be expected at a startup, but with decent HR, this will not be taken to extremes which can lead to severe problems within a startup.
Moreover, a good HR practice can help the startup achieve more with less time. For instance, something as simple as doing away with most common collaboration myths and promoting true collaboration can reduce the waste of time that can sometimes occur within a startup and help people collaborate more effectively. Furthermore, it will work towards reducing the frequency and the intensity of inter-startup conflicts which often happen in highly volatile environments.
Smart HR practices truly show their strength once it is time for the startup to grow. This is when HR done the right way can lead to better hires, a streamlined onboarding process and reduced employee turnover.
All of these are things that can lead to a startup functioning more efficiently.
A Few Challenges To Wrap Everything Up
Of course, all of this can be a bit too much for some startups. When you are struggling to keep a new company afloat, seemingly non-essential aspects of it such as HR can become neglected. Also, in early-stage startups, it can be difficult to establish a formal hierarchy and decide who calls the HR shots.
That being said, smart HR can be one of the most positively influential practices a startup adopts.
Do not ignore it.