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A Guide to HR for New Startups


In the last decade, startups have started popping up everywhere in India. Actually, according to Nasscom, an IT industry leader, India is among the top 3 startup ecosystems globally. In 2019 alone, 1300 startups were registered in India. Currently, there are over 8,900 tech-start-ups in the country. Most startups operate in a volatile environment as such, they run the risk of having insufficient capital, general inability to compete or redundancy. 

HR is Huge

In any startup, HR plays a huge role in the identification, selection, engagement and retention of top talent. A successful startup with a capable HR team should be able to adapt to the changing environment and remain ahead of the curve. The best HR team should help the startup prepare accordingly to meet the demands of the market. It’s prudent to hire the right candidates for the organization. People who thrive in startups are those who can work with ambiguity, make quick decisions with limited information, are not perturbed by the lack of standard processes and structure and have a high-risk appetite. The right fit to a startup environment is more critical than the functional expertise on the table. 

Most startups are working diligently to minimize their costs. As such, they might not be willing or able to shell out large salaries to their employees. HR services allow a startup to benefit from HR expertise when they need it most. To attract the best staff, candidates have to settle for stock options, larger responsibilities, a challenging work environment and an opportunity to build the business from scratch. Working in such a volatile environment requires you to think on your feet. You need to make quick decisions since such empowerment ensures a sustainable and growth-oriented setup. It allows trust and creates a suitable culture of accountability and ownership to guarantee success. 

HR also plays a critical role when it comes to job design and compensation structure in start-ups. Being in a dynamic marketplace, especially with the invention of the gig economy, HR structures and processes should also adapt to various types of employment contracts and engagements for various candidates. The key to proper engagement is constant communication with your employees. If they know and understand the progress, context and overall direction of the organization, they have a higher chance of being properly aligned with the organization.

Even better, they should be able to contribute effectively to the overall achievement of goals and objectives. Note that, losing quality talent in the critical phases of evolution will harm the organization. Note that, HR plays a critical role in shaping the organizational culture. The purpose inspires, values and aligns behavior. It creates a work environment where people can come up with various ways of positively contributing to the organization. As such, this should be a long-term goal with HR in any startup. 

Wearing Many Hats

During this stage, HR has to wear multiple hats during various stages of the organization. It is responsible for hiring the right candidates for the organization and promoting a culture of accountability and ownership.

On the other hand, HR in a startup is responsible for adapting to the changing needs of the employees and organization. To deliver these objectives, HR needs to be a mentor for the young leaders. They need to act as the listener for employees who might be coping with ambiguity.

HR also needs to become an employee champion as they work towards team bonding and collaboration. You don’t really need anyone from the HR department or with a HR background to act as HR in your startup. Most of the entrepreneurs will play this role themselves in the early stages of successful startups to ensure successful continuation with time.



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