The human resources function has changed markedly in the past few decades. The department that has historically been tasked with managing benefits, payroll and the hiring process now plays an integral role in shaping corporate strategy, developing leaders, creating policies and seeing companies through volatile times. Startups can use HR strategically to help shape the company culture, manage employee relations, attract and retain talent, and minimize risk to the business. But what do you do if you don’t have an HR function? Laura Burgess, PHRca, SHRM-CP, CHRS, an HR business partner at Murdock Martell, weighs in.
Connecticut Innovations: Thanks for talking to us, Laura. Let’s dive right in. Most early-stage startups don’t have an HR department. Are there HR policies they should put in place anyway?
Laura Burgess: It really depends. A startup could need wage and hour policies immediately if it has exempt and non-exempt employees, and it could need travel and expense policies if it has a significant number of sales employees or employees who travel for business. It could also need a basic handbook accompanied by manager training to ensure consistency and a positive company culture.
CI: What should HR policies cover?
LB: I recommend a handbook. When working with a startup, I start with a handbook questionnaire and then customize the handbook for the startup. The discussion about the handbook offers the company’s founders a good starting point for topics to think about and helps ensure that employees understand the company’s expectations. It can take only a few hours to get a major document in place.
CI: In the absence of an HR lead, who should handle HR issues?
LB: It is important for HR to handle HR issues. An HR consultant is less expensive than reaching out to your employment attorney. An HR consultant can also work within the company’s financial constraints. Many times when I’m working with an early-stage startup, I am asked to stay within a specific budget.
CI: Is it necessary to devote time to onboarding, or should new hires expect to be thrown into the deep end?
LB: Onboarding is a very important component of company culture and growth. It does not take much time to set up the onboarding process with a canned email, a package of all required forms, and some follow-through.
CI: How do you keep employees happy when there’s not much opportunity for growth?
LB: The startup is the opportunity for growth. The startup needs to position the job as one where the new hire will wear many hats (job roles) and continuously grow as the company grows. The opportunity to define and perfect a role can challenge an employee. Employees grow by personally defining what they like and do not like about several roles they may have in a company.
CI: How important are performance reviews? A lot of startups skip them.
LB: Most startups skip performance reviews until they have about 30 employees. Performance reviews can be conducted at any size company, but generally they’re not necessary until the company enters high-growth mode. The tool then becomes important for evaluating employees, role needs and compensation practices.
CI: What’s the best way to terminate a poor performer? Is there a way to limit risk to the company? What if the employee is in a protected class?
LB: Document, document, document. Most states are “at-will.” If your startup is in a litigious state, however, an employee can file a claim for anything. It is always best for the company and the employee to have documentation around poor performance. It is also important that the company show that it was fair and reasonable in its approach to the decision. Some startups have every terminated employee sign a separation agreement whereby the terminated employee releases any claims against the company.
CI: What options are there for startup employees who feel they’re being harassed or discriminated against?
LB: Employees should reach out first to their immediate supervisor or manager. If that’s not a viable option, they should reach out to an executive-level member of the startup. Harassment and discrimination should never be tolerated, and employees should have written steps and processes to follow if they feel they are being harassed or discriminated against.
CI: What’s the best way for a startup to handle
LB: Communicate to all employees the expectations around office relationships. Create a policy expressing the expectations.
LB: Hygiene issues need to be handled kindly and sometimes delicately. Sometimes a manager can discuss the issue privately with the employee. This is also something an HR consultant could come on site to do.
…hostility/fighting among employees?
LB: Expectations should be set through manager communications, through company leaders and in written policies that outline the expectation of behavior and the consequences.
…an employee who needs to take extended leave to care for a family member or undergo medical treatment?
LB: This is a strong reason for an HR consultant or internal HR person. In federal and state law there are many rules, processes and forms to comply with. It is important to provide fair and consistent practices when applying the laws and regulations around leaves of absence.
CI: If a startup decides to hire a consultant, what should it look for?
LB: Human resources is a large field with lots of people who may specialize in one area, such as compensation or employee relations. HR-related startup needs include compliance, payroll, policies, onboarding and terminations. Startups should make sure the consultant they hire specializes in startups and has several years of experience. It is good to look for someone that has a PHR or SPHR certification from HRC (HR Certification Institute) or an SHRM-CP or SHRM-SCP certification from SHRM (the Society for Human Resources Management). This shows that they are a member of an HR group and have good resources behind them.
CI: Anything else startups should know with regard to HR?
LB: It is not expensive to get advice and guidance from an HR consultant. By doing so, as the company grows it will ensure that it is constantly staying compliant and putting into practice policies and processes that protect the company and show employees that the company values them.
CI: Thank you, Laura.
LB: You’re welcome.
Laura Burgess consults with startups in technology and life sciences and specializes in compliance, process improvement, handbook and policy creation, employee relations and training. Reach her at email@example.com.