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The Role of HR Departments in Startups


Posted by Insightlink on 06/04/21

We are living during an exciting time for startups. The rise of the digital age has helped to make creating a new business more accessible to more people than almost ever before. Entrepreneurs can connect to global resources, knowledge, professional networks, and consumers that can help them on their path. Indeed, a recent study found that in 2020, 804,398 businesses in the U.S. were less than a year old.
 
However, alongside this digital business frontier and the technology that supports it, there are areas of neglect. Among startups, one of these tends to be the implementation of effective human resources (HR). Whether due to a lack of knowledge or an alternative focus, entrepreneurs tend to overlook just how crucial a solid HR department and strategy can be.
 
We’re going to examine just a few of the primary reasons why entrepreneurs need to invest more in these departments. We’ll also take a look at a few ways HR personnel currently in startups can boost their efficacy. 
 
hr department for startups
 
 
Administration
 
HR is a complex area. While entrepreneurs can handle a certain amount of the processes on their own, it can be a serious drain on their time and energy. One of the key areas that an effective HR department can be effective in is making sure that the administrative aspects of hiring and employment run smoothly, allowing leadership to focus their resources on other areas. 
 
This doesn’t simply mean that startups should have an HR department because they can take care of payroll each month. Indeed, a lot of the administration dealt with by HR professionals has roots in the various legislative and regulatory responsibilities of the organization. There are state and federal laws that pertain to elements such as wage rates, who a business can employ and in what capacity, discrimination in the workplace, social security, disciplinary procedures, and accessibility accommodations. These are just the tip of the iceberg. Alongside ensuring that the business is compliant in these areas, the administrative reach of an HR department includes documenting all these practices correctly. The right professionals can help a business run smoothly and also avoid any potential lawsuits as a result of incorrect conduct. 
 
This is obviously a huge workload for any business. Unfortunately, there will be times that a startup will only be able to budget for a single HR professional. If you find yourself the sole manager of this department, it can, therefore, also be wise to find tools that help to minimize the administrative and accounting load. Thankfully, our digital age offers an increasing number of solutions here. If your business hires freelancers, arranging for automatic bill pay through the bank can reduce the need for printing and sending checks. Even sourcing templates for important documents, like employee handbooks, that you can alter as necessary can be a useful tactic.  
 
Connection and Retention
 
One of the mistakes that startup leadership tends to make is that the role of an HR department begins and ends with its administrative tasks. However, these professionals have a more nuanced impact on an organization. Much of their time and expertise is also channeled toward ensuring that the business maintains positive relationships with its employees in ways that impact retention. This is valuable throughout the lifespan of the company — through its early years, weathering tough times, and affecting sustainable growth. 
 
Some of HR professionals’ duties are geared toward ensuring that teams, sometimes made of cross-departmental members, effectively communicate and work together. This starts with arranging adequate tools and training, but also encouraging additional elements like social interactions and team-building exercises that help employees forge stronger bonds. This can be especially valuable if the startup employs primarily remote workers, where communication and team closeness can be more challenging but no less vital to successful retention.
 
If you are the HR manager of a startup, one way you can be more effective is to explicitly communicate these elements of your role to staff members and management alike. Talk about how you are dedicated not just to compliance, but also to making certain that a healthy, happy, and productive culture is nurtured to the benefit of everyone involved. This can also be reflected in the policies that you build for the business — such as wellness programs — where making positive connections between workers and business is clearly a priority.
 
Influencing Direction
 
Perhaps above all else, startup leadership needs to understand that HR personnel are key influencers in the direction of the business. These professionals have a wide range of responsibilities. They recruit talent, design protocols and ensure compliance with them, and design training and development programs. Those who choose this as a career path bolster these actions with communications skills, organizational prowess, and technical knowledge of the industry. The upshot of this is that the role can’t just be treated as just another specialist; what they do makes them an integral part of a startup’s leadership.
 
HR’s influence in startups is even better exemplified by their responsibility to design and implement a talent development program. They not only handle the recruitment of staff but also build the framework by which the best workers can progress through the company. An effective department will be able to create a system that attracts and develops a diverse employee base, giving the company the best chances to innovate and thrive. But by neglecting or understaffing HR, the quality of staff development is likely to reflect this accordingly.
 
As an HR professional in a startup, it is therefore in the best interests of you and the company to understand what direction the company would like to head in. Engage in meaningful discussions about goals and values. This way you can better serve these in your day-to-day activities, and when you are making key decisions about staffing and development.
 
Conclusion
 
An HR department shouldn’t be viewed as a luxury in startups but as a necessity. Alongside familiar administrative tasks, HR professionals are key to developing staff relationships and boosting retention. More importantly, their varied skillsets make an HR department a key influencer in the success of the business — and as such investment in the right professionals here is vital.
 
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