For most entrepreneurs starting their own business, setting up a human resource (HR) division is usually the last thing on their mind. In fact, some actively oppose it thinking that it will infuse rigidity in their organizational processes, thereby, compromising the flexible and inventive spirit of their startup. However, this is a very archaic understanding of HR. Modern HR practices have evolved to understand the need of present-day organizations to stay nimble and innovative and must be an essential part of your business plan.
Moreover, as a startup establishes itself, it is bound to grow in size and/or complexity. And to cope with that you need HR to be able to hire effectively, retain and nurture talented human capital. HR will ensure your hiring processes are comprehensive by undertaking thorough job analyses and impartial job interviews. Trained HR personnel also ensure your business follows all labor, health and safety laws, thus protecting your startup from a legal standpoint.
Clearly established HR policies and procedures allow the business to function transparently. This strengthens employee morale and promotes a supportive culture within the wider organization. So, even if your business pivots and pivots a lot in the course of establishing itself, a structured HR will give your employees a sense of clarity. It will help them navigate difficult organizational changes while guiding them with their individual career goals and aspirations.
The following are pointers to keep in mind when establishing your team and documenting your strategies in your business plan template.
Hiring for HR
When hiring for your HR team seek out candidates who have experience working in the same industry or with a similar sized business. People who have worked with startups before might be even better. This is because startups operate very differently from established organizations. There is more fluidity in the organizational structure and processes of a startup. So, hiring someone who has experience in working under such conditions will be a valuable addition to your HR team. It is also important to test candidates on their knowledge of different HR functions and labor laws depending on their specializations.
Equally important is to select candidates that best reflect the vision and values of your business. Use one-on-one interviews and scenario tests to gauge their attitudes, emotional intelligence and social skills. Testing for both aptitude and soft skills is crucial when screening HR candidates.
Budgeting for HR
Empower your HR team to create a data-driven budget for their department. One that accounts for all necessary HR procedures to be carried out and aligned with broader organizational objectives. As a startup your HR team will not have any prior budgets to rely on, so they must use realistic estimates wherever needed. To create an accurate budget the HR team will need to collate varied information like-number of new positions opening up organization-wide for the year, expected turnover rate, estimated hiring costs, estimated training costs, and anticipated legal costs.
Setting HR Policies
For a startup, being agile cannot be emphasized enough. It is crucial if one is to succeed in an age where market trends and needs change at the drop of a hat. You will be overrun by competitors if you are too slow to adapt to change. Therefore, to create an organizational culture that values agility and fluidity, focus on creating flexible HR policies. Flexible work timings, teleworking, compressed workweek and job sharing among other policies can be employed to stress on the non-rigid nature of the organization. These initiatives give employees considerable freedom in how they approach their work allowing for creativity and innovation to flow freely. They will also dramatically improve employee productivity.
Of course, not every flexible policy might be right for a particular business. However, if possible, such non-traditional HR strategies must be seriously considered to create an open working culture.