Whether or not a start-up needs an HR team can be a complex decision. As a smaller company, there may be fewer employees to manage and it may be possible to manage without an employment expert. However, as the company grows, there may be issues that only an HR team can address.
It’s important to evaluate what tasks need to be handled by an HR team and consider outsourcing some responsibilities such as payroll or benefits management to free up time for more human-centered tasks. Overall, start-ups may need an HR function, but it may not have to be a traditional HR department.
Why do you need an HR team?
In start-ups, the business culture is often flexible and focused on learning from mistakes. Initially, HR teams may not be a top priority as they can be perceived as a hindrance to this culture. However, this mindset can be changed by rebranding the HR team to better reflect their role in the company.
Early on you need to determine which members of the team oversee the following:
- Hiring employees
- Training employees
- Employee salary and benefit packages
- Handling disciplinary issues and employee complaints
- Upholding and cultivating the company culture
- Organizing internal processes
- Maintaining compliance with labor laws.
To effectively manage these responsibilities, a start-up may consider hiring specialized individuals such as a Learning & Development expert, an internal Talent team, and a Chief People Officer, who excel in building innovative cultures, scaling businesses, and driving company values. Investing in a strong People team is crucial for start-ups, as it allows them to attract and retain top talent, who are essential for the growth and success of the business. The goal of the People strategy should be to create a flexible environment that supports the needs of the company and the well-being of its employees.
When should you invest in your first People hire?
There is no set time for when a start-up should hire a People team, as it can vary based on factors such as the industry, growth rate, strategic planning, and workload. However, there are certain indicators that can help determine when it’s the right time to bring on specialized HR personnel.
- As the business expands and roles become more specialized, it may become difficult for the founder or operations lead to handle all the “people tasks” and a specialist may be needed.
- The rate of growth is an important factor, as the faster the company expands the more sense it makes to hire L & D and Talent professionals to assist with employee attraction, development, and retention. Some studies suggest that start-ups with 50 to 100 full-time employees should consider expanding their People team, but it ultimately depends on the company’s specific needs.
- If leaders are spending too much time on HR responsibilities instead of focusing on revenue-generating activities, it may be beneficial to hire a specialist team. This can free up time and resources to focus on other aspects of the business and potentially boost the bottom line.
How technology can complement People teams at start-ups
The advancement of technology has allowed start-ups to delay the creation of a full People team. Human Resource Information Systems (HRIS) can automate many transactional HR functions such as onboarding, payroll, administrative tasks, compliance tracking, and benefits management, which previously would have required an HR employee to handle.
However, it’s important to note that technology can never fully replace the role of a People team, but it can be used to enhance their capabilities. Hiring and managing employees is a fundamentally human activity that should not be automated. HRIS tools can assist human employees to work faster and more efficiently, which means that fewer people experts may need to be hired at once. While HR Tech can be useful, it is not a complete solution on its own, it’s important to know how to use the tools.
How Can Storm4 Help You?
If you are looking to hire People or HR experts, Storm4 prides itself in working with the best specialist consultants available to help you find the right fit for your company. They have an extensive network of highly skilled talent who can drive your company’s culture and growth forward. Don’t hesitate to Request a Callback or Submit a Vacancy via our forms!
