Startups exist in a unique position within the corporate world. Many of these enterprises want to become Fortune 500 companies without adhering to business norms. In some cases, this means handing workforce management matters without an HR department. However, that strategy has proved erroneous and entrepreneurs like Ryan Holmes, the founder of Hootsuite, are beginning to realize that.
"I somewhat infamously have said I never wanted to work at a company with an HR department. That's coming back to bite me a little bit now," Holmes told the San Jose Mercury News.
For instance, Hootsuite didn't have a mission statement until very recently. The void allowed employees to project their own values onto the company, some of which didn't align with Holmes' vision.
However, the absence of HR doesn't just lead to cultural problems within an organization. Therese Lawless, an employment attorney, explained to the news source that office relationships can create liabilities for startups without clear HR policies in place.
What are the best solutions?
Young businesses need HR because the problems caused by ignoring it can doom them to failure. That's why employers need to establish their own departments early on even if doing so would move them closer to a traditional business model.
Hootsuite's strategy was to turn Holmes' assistant into the HR director. This established continuity because that unnamed employee already understood the ins and outs of the organization, making it easy to create effective policies.
Venture Village reports that SoundCloud took a different approach by bringing in Caoimhe Keogan, a former Google staff member, and making her vice president of people. Keogan believes that a thorough onboarding process can have a positive impact on startups.
"We say the onboarding process begins before new staff members even have their first day in the office. So beforehand, they get to meet their teams, they get to meet their managers – so they get to know SoundCloud, its people and culture before they even start," Keogan said.
Of course, not every startup can attract experts like Keogan to develop their HR practices. Fortunately, burgeoning companies with small departments can collaborate with HR outsourcing firms like Triton HR. These enterprises can provide necessary assistance to ensure that new businesses can handle all tasks, including group health insurance administration and payroll services.