When Do Startups Need HR?

altaccelerator — Mon, 18 Nov 2024 17:12:05 +0000

by Mehr Sokhanda

Many startup founders view Human Resources (HR) as a function that can wait until later stages of growth. They often rely on quick fixes and informal processes while focusing primarily on product development and market entry. However, this approach can create significant risks and missed opportunities for building a strong foundation. In an insightful discussion during Altitude Accelerator’s recent Tech Uncensored episode, Beth Nevins, founder of developa.io and expert in talent management, shared her critical insights about when and how startups should approach people management.

“While network connections and HR hacks work as Band-Aid solutions to get a startup to where they need to go, the growth stage offers a greater mandate to acquire great talent, effectively manage expansion, and develop a culture where employees feel connected to the company’s mission,” she explains.

The Evolution from HR to People Experience

The traditional view of Human Resources has undergone significant change in recent years. Where HR was once primarily focused on administration, productivity metrics, and back-office support, modern startups are embracing a more balanced approach called People Experience (PX). This shift represents a fundamental change in how companies think about their relationship with employees.

“PX is about alignment – there’s no ‘first’ involved. It’s about aligning business needs and employee team needs simultaneously. That gives us the best outcome, having weighed up all needs and trade-offs involved,” says Nevins. This new approach focuses on cultivation rather than pure measurement, considering what inputs enhance output and create sustainable growth. The emphasis has shifted from simply managing human resources to designing systems and processes that support both business objectives and employee well-being.

Rather than positioning employee needs against business requirements, PX seeks to find solutions that serve both simultaneously. This alignment creates stronger organizations and more sustainable growth patterns. The role of people teams has expanded beyond traditional HR functions to include strategic planning, cultural development, and organizational design.

Essential HR Elements for Early-Stage Startups

Even at the earliest stages, certain HR fundamentals cannot be neglected. For startups with just a founder and co-founder, or up to ten employees, some elements are non-negotiable. Nevins emphasizes that while budget constraints are real, certain investments must be made to protect the company’s future.

“Founders will have to spend money on contracts. That’s the first thing they should seek advice on. They may decide to use an automated tool or get legal advice from an employment lawyer, but that’s spend you can’t avoid,” Nevins states firmly. She particularly emphasizes the importance of proper documentation for technology companies, noting that NDAs and IP protection might be critical from day one.

Beyond legal documentation, strategic hiring becomes paramount. The first 10-20 hires will determine the company’s trajectory. “If you haven’t got the right element in the first 0 to 20, you’re not getting anywhere anyway. Working out how you can use that budget creatively is going to be important in getting the right initial founding team,” Nevins explains. She advocates for creative solutions to attract talent, including equity arrangements, future role promises, and strategic partnerships.

The Critical Role of Recruiting

Recruiting in early-stage startups requires a sophisticated approach despite limited resources. Nevins outlines several strategies that founders can employ to build their initial teams effectively. First, she emphasizes the importance of leveraging existing networks: “Three people may have 10 connections each – that’s already 30 connections you can tap into.” This network-based approach can help startups access talent pools without significant recruitment spending.

Communication skills become particularly crucial in early recruitment efforts. As Nevins points out, “If you can’t translate that vision on free platforms that are at your disposal and articulate that really well from a copywriting perspective, then it’s very hard to attract the people that you need when you’ve got low brand recognition – all you’ve got is yourself and your words.”

When it comes to professional recruiters, Nevins emphasizes quality over quantity: “Founders need to hire absolutely unbelievable recruiters because they need to do the heavy lifting. They will probably have great experience to navigate through situational relevance, assess for risk, evaluate motivations, and determine stage alignment. They’re being relied on to do a lot of assessment and, on top of business development as well. “

Culture Building and Values

The development of company culture requires both organic growth and intentional design. Nevins makes a clear distinction between values and culture that helps founders understand how to approach each aspect as she states “Values stay the same over time, while culture is more fluid. Values are key enablers to achieve our mission and help us make decisions, particularly useful in times of conflict and crisis. Culture is about the idiosyncrasies and rituals we have at each stage that help us get the work done.”

This distinction becomes particularly important as companies grow and face changes. Values provide stability and guidance during transitions, while culture adapts to support the company’s current needs. Good culture development requires attention to both the formal and informal aspects of how work gets done. It includes everything from communication patterns to decision-making processes, from team interactions to problem-solving approaches.

The Role of Founders vs. People Teams

One of the most important clarifications Nevins makes is about the relationship between founders and people teams when it comes to organizational culture. “The founder is accountable for the culture. The CEO, depending on what stage they’re at, is accountable. It’s not just or only HR or people teams,” she states emphatically. This accountability manifests primarily through role modelling and decision-making patterns.

People teams play a critical supporting role by establishing design principles for operations and infrastructure, setting and maintaining performance standards, supporting recruitment of aligned talent, and facilitating necessary changes during growth phases. They act as enablers and facilitators rather than primary owners of culture.

“I encourage the founder to lead people,” Nevins explains. “Some people get excited that they’ve got this role at the table. But I came to really appreciate that it’s all about the founder – push it onto the founder; help the founder; make sure the founder wants this in terms of their vision and their view on people.”

Managing Risk and Growth

As startups grow, they face increasing risks from inadequate people management practices. Nevins outlines three primary categories of business risk that need attention: execution risk, financial risk, and brand risk. Each category requires different mitigation strategies and carries different implications for the organization’s growth.

When addressing these risks, Nevins recommends a balanced approach that considers both immediate and long-term implications. “You need to analyze the reward versus the risk. Sometimes growing and accepting some debt and risk is actually a trade-off to achieve big things if it pays off.” This pragmatic view helps founders make informed decisions about where to invest limited resources.

She particularly emphasizes the importance of having open discussions about risk scenarios and their potential impact on existing roadmaps. “If the risk is ignored and then it happens, the people leader needs to to make sure that’s discussed upfront with the founder. If we ignore this and it happens, this is the impact then on our existing road map in terms of delivery.”

Building for the Future

As startups mature, their people management needs become increasingly complex. “Post product-market fit, the founder needs to take off some hats,” Nevins explains. “They start working on the company and their leadership team rather than all the minutia of every single task.” This transition requires developing new capabilities within the organization.

The evolution includes building business partnering capabilities, developing change management skills, creating systems for cross-functional collaboration, establishing clear communication channels, and setting up scalable processes. Each of these elements requires careful attention and investment, but they form the foundation for sustainable growth.

“Culture is organic, but it also has to be intentional,” Nevins concludes. “You need to be a little bit intentional for what you’re looking for and how that might play out at each stage.” This balance between organic development and intentional design characterizes successful people management in growing startups.

While early-stage startups may be tempted to postpone investing in proper people management, the foundations laid in these early days significantly impact future success. By understanding when and how to implement proper people management practices, founders can build organizations that not only attract and retain top talent but also create sustainable, healthy cultures that support long-term growth.

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Transforming Senior Care: ConsidraCare Is Creating A New Structure Of Care For Canada’s Aging Population

admin — Mon, 20 Nov 2023 10:49:17 +0000

Canada’s population is aging. According to Statistics Canada, “Canada’s working-age population is older than ever.” Some eye-opening stats:Canada’s population is aging. According to Statistics Canada, “Canada’s working-age population is older than ever.” Some eye-opening stats:Canada’s population is aging. According to Statistics Canada, “Canada’s working-age population is older than ever.” Some eye-opening stats:Canada’s population is aging. According to Statistics Canada, “Canada’s working-age population is older than ever.” Some eye-opening stats:Canada’s population is aging. According to Statistics Canada, “Canada’s working-age population is older than ever.” Some eye-opening stats:

The post Transforming Senior Care: ConsidraCare Is Creating A New Structure Of Care For Canada’s Aging Population appeared first on Altitude Accelerator.

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