How Early Should Startups Have an HR Department?
There are many questions when you’re running a startup, but it’s not just questions; it’s the decisions, too. You have to do what you can to be financially sound. After all, when you’re starting up, there are just startup costs left and right. But speaking of which, there’s still one question that you need to think about: adding on departments and teams.
One of them being an HR department. Do you need one? Should you get one? How many people need to be on the team before you get one? There are way too many questions, right? But wait too long, and you might be in a tangle of personnel issues that could have been avoided. So, let's break down this dilemma in a way that doesn’t bore you to tears.
Why Consider HR Early?
For starters, you need to think of your startup as a wild garden. Initially, it's just you and maybe a few friends planting seeds and hoping something grows. Initially, managing everyone’s roles and responsibilities might seem manageable.
But as your garden starts to bloom and expand, things get complicated. Yes, you have to keep in mind that roles overlap, the weeds of confusion sprout, and things can get messy quickly without a gardener (a.k.a. HR professional).
In the seedling phase of your startup, incorporating some form of HR—one person or a part-time role—can help lay the groundwork for organizational structure, culture, and compliance with those pesky regulations that could trip you up.
Scaling and the HR Equation
As your startup grows, so do your challenges. When juggling more than just a handful of employees, the need for a dedicated HR role becomes more apparent. You’ll need structured recruitment processes, transparent policies, performance management systems, and someone to handle conflicts that inevitably arise.
Just like mentioned in the intro, bad news or bad things might happen. Waiting until things are in disarray can hinder your company's growth, affecting everything from team morale to your bottom line.
What If You Can’t Afford an HR Department?
This is true. It’s not exactly the easiest to hire staff; it’s not the cheapest. Overall, hiring in-house is expensive, and sometimes, it’s not possible because you lack the funds, you can’t give them a living wage, you can’t give them benefits, and you lack the resources they need. But that’s fine; that doesn’t mean you should skip on having an HR department, though.
So, like what was stated, only some startups have the resources or the need to set up a full-fledged HR department immediately. It might be ideal to look into outsourcing, such as hr consulting for startups, as this means you get the expertise and the tools, but all without the overhead of a permanent HR department.
There are options out there, and they’re even more affordable than having an HR department. Remember, you need to have HR as early as your first employee!
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