Invest early in HR; take your startup from ‘good’ to ‘great’

Archana Gopakumar is a Mumbai-based HR expert who has worked with startups and SMEs for over a decade.

“HR (human resources) is not my first priority. I need to have my core functions in place before I hire my HR head.”

“Since we are a startup, I can handle HR till such time that we hit critical mass.”

These are common statements made by founders, CEOs and leaders of startup organizations that I have encountered time and again through my 10-year career as an HR professional. They are statements that I obviously don’t agree with and which actually frustrate me. Here’s why:

1. Build the value system early, processes will fall into place: By having your HR leader or HR team in place from Day 1, you cement the foundation for the kind of organizational culture you want to instill in your organization. This culture can be prophesied through the value system you want imbibed, which in turn gets reflected through the processes and systems that are implemented. For example, if it is an open culture that you want to propagate within the organization through its different stages of growth, this will impact the kind of HR policies implemented, be it in terms of having a work-from-home policy or in terms of the process implemented for reimbursements, etc.

2.  Establish the employer brand, attract better talent: It’s important to develop the employer brand messaging from the start. The employer brand you develop will be your key talent differentiator. By having the employer brand in place, an organization is able to attract a greater quantity and quality of talent, which will form the backbone of the organization. The employer brand needs to be created and defined by the HR team in consultation with the senior management team and hence it is essential to define it from the get go.

3. Hire ‘right’ early, reap cost benefits later: For startups in particular, it is extremely important to get the hiring ‘right’ early on. You want a team of individuals who are as passionate about the cause as you are. Having an HR professional in place while hiring team members will ensure that the ‘right’ kind of talent is employed. You will get people who understand what you are trying to do. The HR professional will evangelize your organization in those crucial formative stages of the company. Recruitment done correctly early on will also have an impact on costs. If you hire the ‘right’ talent and spend money on training them, you can be rest assured that attrition costs and retraining expenses will be significantly lower.

4. Keep a pulse on the market, stay ahead of the pack: An HR professional will help you to keep a pulse on the marketplace in terms of compensation and benefits and best practices which will impact talent management within the organization. Are you looking to get on to a ‘Best Employer’ list early in the organization’s graph? Would it be best to pay market competitive salaries or offer market benchmarks in terms of practices at the outset? These are areas that you can navigate easily with the help of a professional with the right skills and knowledge.

5. Free up the CEO’s bandwidth to focus on strategy: While most founders and CEOs of startup companies may feel that they have the bandwidth to focus on HR, especially in the early stages of the company’s life, wouldn’t it be more practical to hire an expert to focus on the talent issues? This in turn would enable the CEO to focus on broad strategy, raising funds, meeting customers, ensuring project time lines are being met, revenue targets being achieved and so on.

HR has evolved from being the personnel administrative function of pushing files in companies of yore to being a critical partner occupying a seat on the board of an organization. It enables that organization to go from ‘good’ to ‘great’. It is also critical for early stage or startup organizations to remember that when pitching for funds from investors or selling out in an M&A situation, talent and talent management practices are going to be critical parameters on which their organizations will be evaluated.

About the author: Archana Gopakumar is a human resources professional with 12+ years of experience across industry segments. She is an expert in HR management and operational areas related to the employee life cycle, having worked closely with CEOs and management teams in defining and implementing the HR Value Proposition across SME organizations at different stages of their evolution. Archana is based in Mumbai. Connect with her at LinkedIn.

Editor’s Note: Archana will be available to answer your questions on HR and brainstorm on strategies on our special StartupCentral Google Hangout on Friday, March 15, 3.00 PM onwards. Sign up by emailing us your details at editor (at) startupcentral (dot) in. Participation is free.