Considering HR for Your Startup: It's More Than a "Side Project"
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How should you think about HR for your startup? It’s about creating plans, policies, and processes that meet short-term needs and budgets while taking into account long-term risks and goals for your “human resources”. Startups rarely have dedicated HR staff, but there are critical components that require addressing regardless of whether you have two or 200 employees:
Organizational design: What type of structure will you use, traditional, matrix, flat? Who will report to whom? How will teams and sub-teams be structured?
Investing some time now in creating a design for your organization will provide a strong, clear organizational foundation upon which your business can grow.
Recruitment and onboarding: How are we going to find great new employees? How do we make sure they’re set up for success?
You may not be hiring a lot of employees at first, but it’s important to have an idea about how you’ll post open positions, make hiring decisions, and onboard new employees. Even for the first employee you hire, there are critical elements and documents you need to have in place including: offer letter, legislated policy documents that you will want signed off by the employee, employee data for payroll purposes, relevant employment agreements such as confidentiality, non-compete, intellectual property, etc.
Compensation and benefits: What’s fair and realistic in terms of compensation? How should you decide what to offer?
The following needs to be in place:
- General compensation philosophy and outline of your salary structure
- System for managing and processing compensation and payroll
- Decisions around paid time off policy for vacation, sick, and other leaves
- Health, Wellness and maybe retirement benefits, or a plan to make them available at some point in the future
Employee relations: How will you gauge if your employees are happy? Who represents their interests?
With all the excitement of launching your business, you may not be able to imagine a day when an employee comes to you with a concern; unfortunately, it will happen. Make sure that from the first day you have:
- A employee handbook outlining basic operating policies and practices
- A method in place for gathering feedback or complaints
- A plan for how you’ll address issues if they arise
Don't forget legislated policies, for example you must have a policy and a process in place for workplace harassment complaints.
Compliance, health, and safety: These sound intimidating, and that’s because they’re important! How to make sure you’re all safe, legally and physically.
Fair employment practices and a safe, healthy workplace are all critical elements of employee productivity. As an employer, you are subject to federal and provincial regulations related to compliance, health, and safety. Employment policies not only help protect a startup in the event of potential litigation, they also establish a precedent and understanding among your employees about what behavior will and won’t be accepted.
Training, development, and employee feedback process: As employees progress through their career with you, are they growing and developing at the right pace, for both their personal goals and the goals of the company?
By your first anniversary of being in business, you should have a employee goal setting and feedback method in place so that you can provide employees with a forum to discuss successes and let downs. To facilitate employee growth, and consistent improvement for your business, it’s also important to make a commitment to establishing a plan for employee training and development. It doesn’t need to be expensive or all that elaborate; but if you wait too long, you risk losing employees who are focused on increasing their skills and developing their careers.
Adapted from www.humaninterest.com
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Common Challenges Facing Startups
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Product and Its Market
One of the biggest challenges for every business is to find a market fit and create a product that will be demanded on this market. Unsuccessful entrepreneurs create products no one wants.
Capital
The first and most common type of challenge is to gather the money to launch a startup and keep it running. Capital is essential for hiring staff, getting an office space, development of a product, and for marketing as well.
Cash Flow Management and Finances
Cash flow is among the topmost reasons why startups wane into oblivion. It is really a daunting challenge to fund your own business as you have to spend money to make money.
Before you approach your potential funders make sure you have a detailed plan and a defining element of assurance of ROI. You need a brilliant pitch, great customer traction, and flawless processes, in order to get funded. Bootstrapping - the practice of self-financing or using your own savings - on the other hand, is a challenge difficult to overcome, but it saves you from over-dependency on investors.
Finding the right talent
As a growing startup, you need people who can wear multiple hats and are willing to work together with synergy and teamwork in a team - and of course, have the right skills and abilities required.
Hiring and Retaining Right People
Hiring right employees that fit in your culture is very important in getting a head start. According to Pew Research, 40% of your employees will likely to change their jobs within a year’s time. So you need to make necessary arrangements to retain them.
Lack of planning and visualizing
It is surprising how lightly people take planning and forget to cover important things like budget, resources, and potential risks as a part of their business plan. As a result, they falter and fail.
Time management
Even 24 hours in a day aren’t always enough when you are working or leading a startup as there are always clients to be called, meetings to be arranged, and decisions to be taken.
Protecting Business Data
Employing data protection and security measures is a significant challenge you have to overcome. Damages due to cybercrimes are increasing significantly, while more than a third of attacks globally are aimed at small businesses and the number of hackers is growing daily.
Competition
As a growing entrepreneur, you need to deal with your competitors both head-on and logically otherwise you'll just remain behind. For that, you need to have a fair idea where your competitors are, where they are going, and how fast they are going to get there.
Winning the trust of customers
For any business, the ultimate challenge is to strike a chord with its target audience and win their trust. If you wish to cement your position in the marketplace, it is absolutely essential to have a highly satisfied and loyal customer base.
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