HR STRATEGY FOR START-UPS

By Rajeev Soni

Start-up: HR challenges

The Start-up business is a unique opportunity but a faces many challenges. In this day and age of information economy success or failure is determined by the quality of people that a start-up attracts, retains and incentivizes to align their efforts with business objectives.

This by no means is easy. HR Strategy needs to grow and develop in lock step with the business strategy. But a good HR strategy can mean the difference between success and failure.

Start-up HR Strategy focus areas Corporate Culture Team staffing Roles and responsibilities Compensation Structure Internal Communication Performance Assessment and Review General Policies and procedures

Corporate Culture

A company’s culture will get created regardless of whether its creation is consciously crafted from the values that the founders hold dear or it automatically emerges from the actions of founders and early employees Define what is the vision that founders

have for the company What values does the company hold dear

and what all is secondary Do incentive structures, internal

communication & policies and procedures accurately reflect company culture

Team Staffing

A startup is in a unique position where the requirements for the team do not remain constant from one stage to another.

Team staffing needs to be a balance of skillsets. More generalized skills are necessary early on and then move towards specialization as the products/services take shape.

Only technical skills and past experience should not be the criteria for selection. Entrepreneurial mindset, team skills, perseverance and willingness to learn are critical traits for early team.

The recruitment process has to be able to: Attract right talent Align immediate team requirements with future

growth

Roles and Responsibilities

The start-up has to organize its internal chaos, so that it can deliver products and services to market successfully.

The team has to split roles and responsibilities with clear boundaries to ensure minimal overlap.

Each team member has to understand his/her role in the team. At the same time space needs to be provided for initiative and innovation.

HR has to design the basic organizational chart and introduce the basic split of key roles and responsibilities in the start- up business.

HR has to introduce simple and clear job descriptions for employees as they focus on key deliverables.

Compensation Structure

HR needs to create compensation structure such that an individual’s motivations are aligned with the company’s goals.

HR has to design the packages and standardized offers for employees, as the package does not demotivate new joiners.

HR has to introduce the basic leveling of job positions as the internal equity is reached, and employees have no reason to complain.

The package consists of: Base Salary + Performance related Bonus Stock Options and Shares

HR has to balance all components such that first failure does not destroy the entire business of the start-up.

Internal Communication

Start-Up businesses always changes priorities and tasks; the internal communication helps to keep focus on key priorities of the team.

HR should share the responsibility with the start-up founders to set up the regular communication plan.

Transparency: Information sharing and taking team members in confidence is quintessential. so as to minimize employee-management disconnect. Unlike large firms, startups have far fewer options to brush the details under the carpet. Creating a culture of openness, helps dealing with challenges, when they arise.

Performance Assessment and Review

Due to the uncertainty in almost every area of a start-up’s business, trying to force fit traditional methods of performance assessment and review doesn’t work

Individual performance assessment needs to be contextually aligned with the overall company performance as interdependence of various functions is very high. Eg. A salesman can only bring in orders in a sustainable

manner if the product/service solves a customer need at a price that the market would bear.

General Policies and Procedures Trying to define very strict HR policies and procedures

in the early stages of a start-up may be an overkill given the uncertainties around the business as well as the team and structure.

So, HR needs to work in close coordination with the business to ensure that all legal requirements are met as well as employees are clear about the boundaries of their activities and behavior.

Some key policies to include: Employment policies: Hiring, Firing, Code of conduct,

Leave, Travel Trainings, Promotions, Job enrichment & enhancement,

Transfer, Grievance redressal.

Thank you!

It all needs to be in Harmony!

Rajeev Soniwww.rajeevsoni.com

rajeev@rajeevsoni.com