10 common HR mistakes in StartUps — or why some companies make it and some don’t

Jenny Buch
Feb 17, 2016 · 9 min read

Most of you would probably agree that hiring, maintaining and developing great people and talent is one of the toughest challenges you face when building and running a company. At the same time we all know that having the best people on the bus can sometimes decide between life and death of your company. So why do the majority of StartUps still don’t get it right?

Having worked with close to a hundred startups around the globe in the past years, I’d like to share some insights on my findings with you.

First of all, good news: We all face the same challenges, fish in the same talent pool and compete in the same markets, so chances to become the best are principally equal for everyone. Yet some of us seem to be much more successful when it comes to people and culture in their companies. So why is that? And what is the secret sauce that makes it seem like they’re hiring the best talent out there with ease? Let’s have a look at 10 common HR mistakes — and some practical tips on how you can avoid them in order to build a company people actually want to work for.

#1 Your vision is to make money

Why do we need a vision and what is it?

A vision is like the “north star” of every company that points us to a position in which we want to be one day, like a dream.

Having a vision is incredibly helpful in making people join your company because it allows them to identify with you and your dreams. Your employees want to join something that is bigger than their daily “getting paid for work” routine, they want to be part of something incredible. Having an uninspiring vision, not having a clear vision at all — or having a clear vision but failing to communicate it right — means you just got rid of the number one argument for why people should work for you. Try to make your vision tangible for people by talking about it and by communicating regularly on the progress of it!

#2 Your core values are posters hanging on the wall

Vision, Mission and Core Values are your basic tools for the strategic planning and scaling of your organisation. The Mission of the company is something that every employee should be able to tell within three seconds since it describes what the heck you are working on the whole day. Your core values are the secret sauce to your organisation but only if they are lived by every single day. There are too many companies out there that hang their core values up the walls but actually never follow them.

This not only leads to your core values being useless but it will also make your employees not listen to you anymore when it’s about something big. That’s why you should try to bring them to life as often as possible and recognize and reward those who follow them. Make sure you review your core values on a regular basis so they stay up to date with your company style.

#3 Your employer Branding is non-existent

Ever wonder why there are some companies out there for which almost everyone wants to work without actually knowing them? The secret is: they kind of do know them. Let’s talk about HR Marketing. HR deals with people, and people interact with many other people inside and outside the company pretty much every day. You need to understand that every interaction you have with a person outside AND inside the company is a potential future hire/referral for your company. So you should put an enormous amount of effort into making this experience incredible and positive. Whether it’s hiring the right kind of people or going the extra mile to create a perfect job advertisement.

Your #1 candidate source today is employer branding.

Knowing that, it’s astonishingly rare that HR departments track their marketing activities accordingly (e.g. careers site performance), and there are not many tools on the market that do support such deep dive analytics for HR. HR needs to be data-driven!

#4 You don’t have an HR person established or you get the job wrong

Let me clarify something first: HR is not necessarily an administrative job. Only because it has more to do with people than software development, it doesn’t mean your HR person should work on filing expense reports. HR is also not supposed to take over the managers’ job in guiding and leading their teams but what HR definitely should work on is your company performance: taking care of people and team performance, bringing awesome people on board to help getting better at whatever you’re doing, maintaining happiness and satisfaction.

So at what stage of your company could that person be of any value? That’s correct, from employee Nr. 2 onwards. In reality, HR often gets hired way too late and stays understaffed for way too long of a time, unable to perform its duties to the fullest. There should be at least one HR Manager for 50 employees. Afterwards you might want to branch that out into HR specifications such as Talent Management and HR Development.

#5 You don’t get shit done and demotivate your team aka “my CEO is crazy”

Unfortunately that’s quite a common thing and is in no relation to whether or not HR is established. Some CEOs tend to have a tough time handing over tasks to people whom they’ve just hired to do them. I call them “crazy CEOs”. Crazy CEOs fear that the job will not be done as well as if they would’ve done it themselves. Instead of helping the new hire to get better or even get started at their job, they start micromanaging her. As a result, the crazy CEO is disappointed and stops delegating the tasks in order to keep on managing the topic on her own.

That not only leads to the CEO quickly becoming the main bottleneck, also for other teams, but it is also highly demotivating for the people that work for him.

Crazy CEOs pay a lot of money for people whose job they continue doing.

That doesn’t make any sense! Try to hire people whom you can trust 100% and give them a chance to prove that they are worth your time, if not let them go again. Do your best to onboard them and help them to get on track as fast as possible. Stay close to the employees your new hire is managing and to his direct peers to get the vibes of the team as early as possible. Specially senior hires often fail because of a lack of integration during their first days at the new job.

#6 Your middle management is too inexperienced

We’ve all been in the situation that we hired a team and realised we need a team lead for it. Now since we work in a startup the ideal solution is to promote the best one out of the current team and make him the team lead, right? Before you hand out the promotion, think about if you truly believe that person will be a good team lead. Compared to other candidates on the market, is your guy really the one you’d pick? Has he enough time to grow into the role before another ten people get hired? In 70% of all cases your answer is probably: No, actually he’s not the best fit for the role.

Now why is that so extremely important? Your middle management is delivering one very important service: They lead your teams, the people that are closest to your customers. They bridge the gap between you and your employees. That’s why they need to be extraordinarily great in what they do. If one of them fails, the team behind them will fail as well! Managing big teams is not easy and not everyone can do it, so you might consider someone that did it before and has a proven track record of success. A good developer doesn’t necessarily make a good team lead.

#7 You internationalize and your biggest concern is the legal part

Be okay with the fact that there’s only so much you can know when entering a new country. No matter how much you prepare, you don’t know what you don’t know and you can’t be an expert in every country’s legal system. Have a trusted partner on the ground that helps with the legal side of things and concentrate on the far more important topic: How can I run my company in several different countries, timezones and cultures simultaneously and successfully?

I believe that is one of the most undervalued challenges companies face these days. It impacts the organisation and the people within it a lot and, if badly managed, it will eventually lead to hiccups across the entire company. There is no “one size fits it all” solution here but try to reserve enough time to properly think the people challenge through. What impact will this have on your company culture? How will people effectively communicate with each other? What are the cultural differences between the HQ country and the new one and how will this impact your company culture?

#8 Your culture is a ping pong table and office dogs

Wondering why your candidate referral rate is below average and your employee happiness is far from excellent? Well, if you consider your ping pong table being your company culture, that’s probably the reason why.

But what is culture? The culture of a company encompasses the values and behaviours of people. Factors that contribute to the culture are the vision, core values, norms and symbols, languages, beliefs, and habits.

Culture not only contributes to inner company values but it also helps to create a unique social and psychological environment outside the organisation and, as such, it is a super powerful tool.

If part of your culture is for instance to have a healthy work/life balance for your employees, then the ping-pong table can help you support this culture but it is not the culture itself. If your culture values being on time for meetings and innovative tech-solutions a ping-pong table is not what’s going to save the day. Try to think about behaviours that contribute to the company vision, incentivise them and make them available for everyone.

#9 You fail in holding yourself and your team accountable

Ever experienced a moment like this: It’s a regular day in your life working at a StartUp. The company is now two years old and you turn around, wanting to ask your colleague something only to realize that he went home already. You check your watch, it says 6.00 pm. You don’t understand and turn around to the rest of the team but they are gone as well. You stand up, walk around the office and you understand that you are one of two or three people still working in the office. You are the CEO.

Chances are that your employees don’t believe that working longer hours will be of any value. Your employees usually work for you because they believe that if they do a good job, great things will happen to a) the company and b) to themselves. They stopped believing that.

You’ve missed the point to start holding your team accountable (for good and bad things happening). Lack of accountability leads to a root cause of actions that makes your organization slowly rot from the inside. You want your employees to feel responsible, just like you do yourself but it’s not that easy as in the beginning because not everyone is fully owning a function or project on their own.

Start changing this immediately. I mean today. Let go of the people you think can’t contribute to a company that is result driven. Hire experienced enthusiasts for your future culture and make sure you set up some guidelines around what is expected from people. Celebrate success heavily and value every employee. Then follow the above points 1–8 and repeat this exercise on a recurring period.

#10 You still call it “HR”

Please don’t call the people dedicated to the most important company value (the people) “Human Resources Manager”. We’re not talking about crude oil or iron ore here.

“Whoops! We’re out of humans, let’s make sure to get another few tons in so the machine doesn’t stop running!” — is what nobody says, ever.

It’s 2016 and Humans are not a “resource” anymore. I mean it, please stop calling us that. Those “resources” work really hard at bringing your vision to life. They’re building your product, managing your teams, creating your brand. They’re your voice whenever you can’t be around because you are too busy. Some of them might even become close friends over time. So let’s just agree that “Human Resources Manager” is not a good title for someone dedicated to your employees well being and productivity.

A much better title is “People Manager” or “People Operations Manager” or my favourite one: “People and Culture Manager” — Thanks to wonderful Vend for creating this amazing and honest title. Not only does it reflects what your (HR Manager) should actually be working on, it also sends out a great signal to potential candidates: if you work for us, you’re not just going to be another minion, we actually care.

So there it is, my dear startup founders, my fellow people and culture managers, my venture capitalists. Which of the above leave a bitter taste in your mouth? Which one of these sins have you committed or have experience with? Let us know in the comments!

Point Nine Land

Thoughts about SaaS, B2B marketplaces, venture capital, and occasional sneak peeks into P9’s kitchen

Point Nine Land

P9 is an early-stage VC focused on B2B SaaS and marketplaces. Point Nine Land is where the P9 team (and sometimes members of the wider P9 Family) share their thoughts on SaaS, marketplaces, startups, VC, and more.

Jenny Buch

Written by

Point Nine Land

P9 is an early-stage VC focused on B2B SaaS and marketplaces. Point Nine Land is where the P9 team (and sometimes members of the wider P9 Family) share their thoughts on SaaS, marketplaces, startups, VC, and more.