HR for Startups: Hiring, Firing and “People People”

When your startup business starts, there is very little time to think about anything else, other than developing your product, getting feedback, and working out how to best get the idea to actually sell and make your millions. 

It’s all hands on deck, and your (probably) small startup team will cover almost every task between you, whether you specialise in it or not. You will likely use freelancers and agencies to fill in any remaining gaps at first, but soon it will make sense to hire and train up your very own employees.  

The question is, at what stage will you need Human Resources? With the average small business owner racking up 18 hours in HR time every month, surely your time is better spent elsewhere? 

From the minute you choose to have employees, you’ll need to recruit, retain and review them, but that role usually informally falls to whoever has the most natural rapport with people on your existing team - the ‘People Person’. But, time flies by, employee numbers rise and, unless they’re happy to take this on full time, your People Person will have other stuff to get done. 

We think there are 3 main reasons to look into hiring a dedicated in-house HR person: 

1. If you’re spending between 18 and 40 hours each month on HR-related tasks
2. If you’re approaching 50 employees
3. If you’re planning to scale up quickly

Let’s just keep our People Person

HR is not the smallest investment you’ll make, but it is one of the most important. Though it may be very tempting to try and persuade your in-house People Person to do it full time...after all, it’s easier, they already know everyone, they understand how the business works...it’s not a good idea. You need a professional. Why? 

Compliance with workplace laws

Are you 100% confident that your every action complies with the rapidly-changing avalanche of workplace laws? It takes time to learn the basics (HR is a 4 year degree in the UK), and commitment to staying abreast of the near-daily changes. 

If it all goes pear-shaped

All of your employees won’t be happy all of the time. You’ll have disciplinaries, dismissals, maternity and paternity leave, performance reviews, maybe even redundancies. Dealing with these situations delicately, discreetly and lawfully is crucial, in order to avoid a lawsuit from a disgruntled employee. 

A positive company culture 

We already know it’s much more cost-effective to keep a current customer then go out and find a new one. The same is true for employees. Replacing an employee has an average cost of ￡30,000 (calculated using separation, recruitment and initial productivity costs), so creating a positive company culture, designed to keep staff happy and fulfilled, is very important. HR can help you shape this culture by recruiting and retaining employees with the perfect fit for your company culture.  

Wherever you are on your startup journey, remember that your People Person, however useful, can only last so long, and be ready for the point where you need to call in the HR professionals.