HR 101: A guide for startups

THE NEXT TEN MINUTES COULD SAVE YOU MONTHS IN THE YEARS TO COME. BECAUSE IF YOU DON’T GET YOUR HR PRINCIPLES IN PLACE NOW, WHEN YOU ARE THE HR DEPARTMENT, YOU COULD HAVE SERIOUS STRUCTURAL ISSUES TO DEAL WITH WHEN YOUR BUSINESS TRANSFORMS INTO SOMETHING BIGGER.

How’s business? If it’s really taking off, that’s great. Your business is going to be your future, so you’ll want to do things the right way. But if you’re just starting out, you’re probably just doing Human Resources your way. So how do you start doing things properly?

Firstly, what is the role of an HR Officer?

According to a UK organization offering HR training, HR officers are responsible for:

• Conditions of employment
• Equality and diversity
• Negotiation with external, work-related agencies
• Pay
• Recruitment
• Working practices

We'll go into more on what these tasks consist of shortly, but before we continue there’s one important thing you need to know: you don’t necessarily need to hire an HR manager. As a small business or startup, outsourcing to an HR consultancy will meet most of your hiring and management needs.

An insider’s guide to outsourcing

“Outsourcing is great for accessing experienced HR counsel in a financially manageable way, when you need it” says Paula Meir, a global HR consultant, executive coach and author.

But how do you choose which outsourced HR partner is best for you? Two points stand out in particular, says Regine Buettner, Executive Vice President of HR Global & Europe at DHL Express: “Make sure you choose a partner who has the same values as your company, identifies with your company culture and understands your specific business challenges. It’s crucial to find a true sparring partner who is not afraid to give you feedback and challenge your ideas.”    

Unlike smaller businesses, bigger businesses need access to HR personnel day in, day out. They’ll be dealing with recruitment, career development and staff grievances, plus administrative tasks. Instead, you need assured advice at short notice but without the sunk costs of a full-time, permanent HR team – and that’s when it makes sense to hire an external HR consultancy.

“As a small business you could go for months without needing advice,” says Meir. “And, as all businesses do, you’ll eventually run into problems, ranging from quick and simple to downright complicated.” But you also can’t lose sight of the long-term impact of your HR efforts. “It is important to realize that any decision you make for your staff” says DHL Express’s Regine Buettner, “will impact them, your company culture and your business results in the long-term. Thinking ahead will save you lots of energy, time and money. So it’s important to get it right first time.”

That’s where outsourced HR consultants come into their own. Are you looking for advice on GDPR and employee data? Or creating a long-term HR plan? Perhaps a disgruntled former employee is taking you to court? An HR consultant can help. “The majority of HR work in a small business or startup is administrative, so outsourcing allows access to more experienced counsel,” says Meir.

Set your company culture early

Establishing a positive organizational culture is a key aspect in the role of Human Resources. Start your company’s working practices on the wrong footing and you could be planting a problem that will grow into something serious. “Company culture needs to be a top priority” says Buettner. In fact, company culture can guide success in every part of your organization. “Building a great culture that puts motivated people first will lead to better results and better customer service. Which is key to creating loyal customers and making your business profitable. I firmly believe this is not something you can postpone.” So how do you start creating a positive company culture? Paula Meir explains: “Company culture is driven from the top (CEO or MD) by values, behaviors and leadership style. The HR department is there to help facilitate the culture within the business.”

Regine Buettner firmly agrees: “While culture is driven from the top, it is the HR team that is the guardian of this culture, creating working environments where it is nurtured and sustained.” For instance, if you neglect to set regular salary reviews, you could lose someone important later on. Ignore equality and diversity in your approach to hiring staff, and your organization could grow into a brand with an ugly reputation. Recruit inefficiently, and you could jeopardize the entire future of your business. A growing business has to do things its own way, but just as accountancy has to be done legally, Human Resources needs to be managed right, especially as the business grows: “When you are scaling a business there is no doubt that processes and structure may change in order to underpin growth," adds Meir. "However, that doesn’t – and shouldn’t – mean that the original principles that made it successful in the first place should be forgotten.”

Test for the best

Personality tests can be a great way of nailing your recruitment process. Regine Buettner comments; “These tests can be an important touch point between your candidate and company. So it’s an opportunity to make it a great experience. You might also think of limiting your use of personality tests to hiring for specific functions. Ask yourself the right questions before making a decision to implement a test: first and foremost, what do you want to achieve with it? Keeping in mind that it’s important to get it right first time, both for you and for the candidate.”

Is your business likely to cross borders?  

You need to consider this question seriously before developing your HR strategy. If the answer is ‘yes’ and you’re planning on making waves internationally, your HR principles need to encompass global requirements. For instance, your staff will fall into three categories:

Parent Country Nationals (PCN): Employees working in a country they didn’t originate from, also known as expatriates. When these employees work for long periods (perhaps 4-5 years or more) in the Parent Country, they run the risk of being termed as a ‘de facto’ employee in the Host Country and subsequently the labor laws of the host country apply.

Host Country Nationals (HCN): These employees of an organization are the citizens of the country in which the foreign subsidiary is located.

Third Country Nationals (TCN): These are the citizens of a country other than the country where the organization is headquartered or the country that is hosting the subsidiary.

There are also multiple other issues to consider when deciding how international your business is likely to be, such as:

• Taxation
• Coordinating salary payments in multiple currencies
• Relocation services
• Making sure your staff are properly oriented when they arrive, with access to translation services
• Helping families settle, with housing, schooling and the coordination of dual careers

“When you are working with different cultures, different time zones and working practices,” says Paula Meir, “you need to be mindful that what may work in your home country may not work in another. In other words, be flexible and stay curious!” Delivering to 220 countries across the world means that DHL Express knows a thing or two about working across different cultures and time zones. Regine Buettner adds: “Understanding different cultures and ‘thinking global and acting local’ is key to the success of international HR professionals. Workplaces are as diverse as people are. Being an employer of choice in one country might mean something very different in another one. You never stop learning and I always recommend you visit a country, go into the field with people and experience it for yourself.”

A day in the life of an HR Officer

• Read potentially hundreds of CVs
• Schedule interviews
• Conduct interviews, in person and by phone
• Test candidate skills, often in two or three different languages
• Give presentations
• Discuss a hiring decision with stakeholders
• Conduct pre-offer screening, by checking references and other records
• Offer a job to the successful applicant 
• Tell unsuccessful applicants they weren't selected for the job 
• Schedule newly hired employees for post-offer screening, such as drug tests and criminal history checks
• Respond to random applicant queries
• Help managers monitor and document employees' performance
• Explain HR policy to management
• Terminate an employee
• Promote the company at events
• Assist an employee who is being evicted, or dealing with a health issue, or facing divorce
• Schedule interviews for the rest of the week
• Update and implement staff incentives & benefits

HR: Hardly Relevant or Highly Required?

No matter how friendly and employee-focused your HR department is, there’s no doubt where a good HR person’s loyalties lie. So, as your company grows, your head of HR will be one of your most important executives in the boardroom. And, company culture being one of the most elusive goals for any management team, you’d be wise to give your HR chief wider responsibilities. After all, plenty of people say that HR people make great CEOs, but not too many will agree that CEOs are much good at HR.