Why the Fund does a startup company need an HR manager?

5 Reasons why an HR specialist can bring a startup business to a higher level.

Wait, … what?

As a team member or founder of a startup company, you meet a lot of professionals. Looking for potential partners, investors, advisors, clients, other startup companies and mentors; we usually talk about our business and the team we are developing.

- “We have our co-founders (a CEO, CTO, CFO), a couple of developers, an HR manager, a marketeer, …”

- “Wait, … what? Why do you guys have an HR Manager? You are only eight people…!”

A fair question with a convincing answer.

1. A startup company grows fast!

Organizational growth.

Entrepreneurs know that finding the right people who fit the team as well as keeping them motivated is vital for the operation of the organization. Startup founders, however, unsurprisingly tend to focus on their core operations first. When a startup gets its funds and the business is growing rapidly, there is an urgent need to deliver. Founders may suddenly find themselves in a situation where they need to hire new team members and convince the team to work as hard as they ever have.

Unfortunately, they have to do this without having the time to truly invest in the recruitment process, the team or the team members’ experience. After all, it doesn’t make sense to organize a training program, a fun team activity or a coaching talk, when there are three important partnership meetings to prepare.

“The hardest and most stressful phase for a startup founder isn’t when they are looking for funds or trying to find partnerships, but rather when they have the funds and need to deliver on all their promises.”
Rémi Wildschut, Co-founder and CFO WeGroup

An HR officer can help anticipate the HR needs of an organization as well as invest energy and time in the process of recruitment and selection in order to find the right candidate - instead of the first proper candidate that comes forward.

2. Problems will come and go. But culture is forever.

— Brian Chesky, Founder Airbnb

Organizational culture.

Working at a startup certainly has its perks, but it does require sacrifices from team members. They usually don’t get the same benefits or wage they could get at a big corporation and they might have to mentor themselves, for there is usually no team leader to completely show them the ropes.

Startups can counter this by creating a strong organizational culture that motivates team members to put in the long hours and go the extra mile. Instead of being limited to a specific task description, team members should be given the freedom to create and try out new things; be given the room to make mistakes and get back up; and get recognition for their work. And then, when the startup gets big, all those involved get the unique chance to be part of that success story.

Defining and maintaining a strong culture is as important as building it. Instead of putting up a random cool quote from BrainyQuote, founders need to align and define which culture they want to build first. After that, a startup can build that culture by showcasing it everywhere: from the way people are recruited and selected, to the way team members write an e-mail or welcome a new client.

An HR specialist can be the guardian of the startups’ organizational culture by continuously promoting initiatives amongst team members, finding people who will showcase the behaviors you find important, and by creating an environment in which the organizational culture can manifest. 
When you invest in organizational culture, team members will give back!

3. The art of juggling is not to catch the balls, it is to let go at the right time.

Reaching the teams’ full potential.

Startup founders on average work the equivalent of two or three fulltime jobs. Their work generally consists of tasks in their field of expertise (e.g. finance, fund raising, sales, marketing, operations, …); tasks concerning management of the organization; and - if there is time - “all the other stuff”. While determination and engagement can help founders to cope with all the tasks at first, juggling too many balls for a long period of time carries a certain risk. Especially when a ball gets dropped or when more balls are thrown in rotation.

With the involvement of an HR specialist, founders and team members can focus on their own area of expertise without having to take on various time-consuming tasks just because someone has to do it. Because startups work a lot with young people: starters, students or interns, it is important that an HR specialist can keep the focus on the team and every single one of its members. He or she can make sure that motivation and satisfaction is high and that nobody thinks twice about the long startup hours they put in. This leads to a more engaged team and will raise productivity as a result.

4. Everybody starts caring when it’s too late.

Competitive advantage.

It is definitely true that a startup could wait to hire an HR specialist until it feels the need to. The problem is the need will only be felt when people are handling too many things, the organizational culture is not healthy or small conflicts are making team members uncomfortable. The need for an HR specialist will be felt when the organization is starting to feel like a classic corporation,when someone didn’t fit the culture and stayed on a little bit too long or when there is a need to a bigger amount of team members because of absenteeism and high rate of turnover… 
A bit exaggerated or very recognizable?

The moment an organization eventually feels the need to hire an HR specialist, is probably when it is very difficult to catch up and meet the needs of the organization. Which is why so many companies can not handle their own growth and fail. Fire-fighting and building the foundation of a house usually do not happen at the same time. Or somebody needs to change the job description of a fireman.

Hiring an HR specialist from the onset, gives a competitive advantage because he or she will develop the required processes a startup needs to anticipate and facilitate growth, e.g. group assessments, performance evaluations, standardized onboarding tools, … 
It is never to early to start caring.

5. AirBnb is doing it, so why shouldn’t it work for us?

Evidence-based HRM.

Every founder wants to have a happy and productive team. Often, however, they don’t have the expertise to use the most effective way. Instead of implementing simple, yet effective evidence-based tools or processes to improve performance and satisfaction, founders are more likely to come across the latest book of a self-proclaimed Sillicon Valley guru and copy-past the most exuberant practice.

How cool a puppy day care sounds or how effective people claim MBTI to be, it is a much better idea to first implement remote work opportunities, give team members learning opportunities and work with I-deals. A startup is not going to create Twitters’ employee satisfaction by just giving yoga classes at work.

Too often, the answer to the question “what do you invest in your team members?” is expressed in terms of currency. Instead, the answer should be given in terms of the organizations’ HR practices. An HR specialist helps startups to be smart with their investments and introduces evidence-based tools that allow the organization to grow employee satisfaction and team performance.

Read this interesting perspective on how companies continuously jump onto the next hype rather than implementing tools that work.

Side note: putting your money where your mouth is.
Short term perspective: if eight people work full time at a startup, the productivity of said organisation should be raised by 12,5% when adding an HR manager. If you would do the math, take into account the higher amount of working hours, the employee well-being, the impact of absenteeism in a micro-organization, the high demand from team members when the stakes are high, the elevated brand ambassadorship and the fact fact that the HR specialist gives the CFO (who often functions as the CHRO) 55 minutes extra to find funding for every hour the HR specialist works.

To be honest,

when we find ourselves at a networking event and people ask us “Why the FUND do you guys have an HR Manager?”, we don’t take the time to give the full answer. Our results speak volumes so we just say:

We want our team to be taking care of, don’t you?