HR doesn’t have to be a chokehold for growing startups and small and medium size businesses. There are ways to organize your human resources and hiring, while still being flexible.
Here’s why startups and SMBs should embrace structured HR and recruiting processes:
Startup and SMBs rely on a flexible business culture. They need to be able to fail fast and pivot. Structured HR and recruiting practices aren’t the first things they prioritize because executives see them as dreadful “corporate,” culture-killers that threaten innovation and flexibility. So, developing good HR and recruiting processes usually takes a backseat.
But when left unchecked, unstructured HR and recruiting processes can do more harm than good. They can foster toxic work environments, create confusion and negatively impact employee morale and retention.
Businesses that deliberately develop a strong HR tools for startups show that they value employees and their business. These companies are better at:
Hiring employees;
developing employees;
and retaining employees.
When you invest in HR, you are better at hiring because you’re more likely to:
Create inclusive job titles and descriptions that aren’t discriminatory. HR staff help you come up with accurate job titles and job descriptions to entice qualified candidates to apply. This is key for startups looking to scale and hire diverse teams.
Conduct structured job interviews. Hiring the right people is critical for small businesses, and unstructured interviews invite bias into hiring processes. HR and recruiting staff can help startups follow structured interview processes to rate candidates on fair, predetermined criteria.
Protect businesses from lawsuits. HR staff are the point-people for legal matters – including state and federal labor laws. HR staff help you understand complex legislation and what it means for your business (e.g. how to interpret the Family Medical Leave Act in the U.S.)
Startups and SMBs with strong HR practices are better positioned to develop and retain employees, and both are important for business growth. They are more likely to:
Fairly compensate workers. Compensation and benefits are a huge part of HR. Without HR professionals, conversations about pay increases are fraught and could come down to how managers ‘feel’ about an employee or position instead of what the fair market value for a role is. Fair compensation practices also prevent you from developing a gender pay gap.
Invest in training managers. Startups are full of people who are “generalists” – employees who wear a lot of hats. These generalists often find themselves in management roles, without any formal management experience. Management training is important because the quality of your managers directly affects whether employees decide to stick with you, or abandon ship.
Care about workplace culture. Good HR and recruiting departments take the pulse of employees in a way that doesn’t feel like policing. They consider their candidate experience, conduct new hire check-ins and meet with employees regularly. This builds a strong culture that feeds a strong employer brand, which leads to better hires.
Recognize the need for policies. As businesses grow, new employees may encounter new workplace issues: e.g. how to manage noise, process expenses and manage paid time off. HR departments work with executives to create policies that answer those questions uniformly. This helps manage small conflicts before they become big ones.
Cultivate career paths. When companies reach at least 30 employees, figuring out how to develop those employees becomes critical to retaining them. HR is the best arm of your company for developing career-pathing programs to prevent turnover, which is expensive and disheartening for employee morale.
HR is a reflection of a company’s leadership. As long as you value flexibility, you’ll be able to structure an HR department that is creative and flexible.
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