Unfortunately, most of the startup founders are focused on fundraising and commercial matters and they prioritize Human Resources at last. This raises the question of why and when do we need Human resources (HR) in startups?
Startups are trying to replace HR with software and consider people as codes and expect to find the right results by commands. The most important note that should be considered is that while forming the culture is important, replacing a human with software leads to failure.
Let’s review the problem. With the lack of resources, the feeling of uncertainty and change of directions, how can a person argue that startups don’t need Human Resources?
Indeed, HR plays a main role in every business, especially startups. In most of the cases, ignoring Human Resources in the initial stage of startups leads to lower rates of success. According to a study by Stanford PEC (Baron and Hannan) which took 8 years, companies that consider HR were the least likely to fail and the fastest to go public.
But why most of the startups think it is not necessary to have Human Resources? The answer is one word, “lean”.
Lean, the word which was heard thousands of times by startups, is becoming like a magic word. It’s fighting bureaucracy whereas HR is associated with compliance and process. This is the main reason that most of the startups refuse to take HR. However, HR could offer lean methods too.
Clarifying the roles of the executive team, ensuring about the hired employees, the internal processes of communication and the culture forming are just some of the main reasons which answer why HR is vital for startups.
Human Resources helps manage people’s resources as one of the main business resources. HR also develops employees’ skills at all levels of the organization, utilizes strategies to increase employee commitment and builds the company capacity to offer the unique set of goods or services.
Considering all these facts, when does a startup need HR?
When a new service or product gets launched, a team member doesn’t perform well and there are internal and external conflicts, HR would be in charge to solve the issues. However, there are some important notes which should also be considered. HR would be efficient for startups with less than 30 individuals. In such a case, the founder could drive the core competencies of work and culture.
Startups need HR to create their own competitive advantages. They compete with each other on a talent war era, however, it is not just about attracting talents, but it’s also about keeping talents, helping them to grow and stay committed to the company. All the startups involve with this game, the game which has no end and the key to success is PEOPLE.
With all these in mind, let’s review the main question of this article again: “Why do startups need HR?”
Baron, James N. and Michael T. Hannan. Lessons From The Stanford Project On The Emerging Companies. 1st ed. The University of California, 2002. Web. 7 Oct. 2016.