HR For Startups

Recently on HR Insider, we had the chance to speak with Emma Leeds. Emma is the Senior HR Director at Canvs, a startup tech firm in New York that specializes in emotional analysis. Through the years, Emma has worked in the HR department of several startup businesses, accumulating unique knowledge specific to this niche. Today, she shared with us some of the expertise she’s gained from these positions.

 

Building a Solid Foundation

For any new and growing business, creating a solid foundation is crucial to its survival. That foundation begins by hiring competent members in the HR department. As Emma points out, “You need to be able to trust that [the person you’ve hired] is going to be able to handle the compliance, changing laws, the payroll, the benefits, all of the pieces that you really can’t mess up. When you mess that stuff up, then you have nothing, you have no foundation.”

Without trust that your HR department is running as it should, your employees will be more upset if any problem with payroll or benefits occurs. They will doubt that the department will be able to correct any errors. Additionally, if the foundation is laid incorrectly, future HR employees will have a much more difficult task in building employee trust.


Examining Turnover

It’s a natural part of any growing company for employees to come and go. However, there is a difference between healthy and unhealthy turnover. Not everyone will stay with a company as it ages — some people will outgrow the roles they occupied when they began, and that’s normal. The problem comes when multiple people begin to leave at the same time. As Emma puts it, “when you are a 30-person company and three people leave, that’s 10% of your organization!”

If several people begin to leave around the same point, there’s probably a reason for it. Many companies make the mistake of examining the recent past in search for an answer, when instead, they should be looking farther back. Emma explains that “turnover is a lagging indicator of how engaged people are . . . You can’t look at right now, you have to look six to twelve months ago because that’s when the seed is planted in someone’s head. That’s when they start to get disengaged.”

A tool that Emma has found particularly helpful in diagnosing engagement is Culture Amp. It utilizes an anonymous survey to target questions about employee happiness. It also looks at specific data of individual groups or teams and compares that to the company as a whole, creating a diagnosis as to what can be done to help improve team engagement — leading to less unhealthy turnover.

 

Managing Company Culture

Because of the quickly-changing nature of most startups, there is often room for employees to quickly climb the ladder into higher positions. While this is great for the individual, it can be a deterrent to the company. With so much escalation, it may happen that all leadership positions come to be filled by people who have never held those positions before. How can a startup compete with a much larger, established firm if all of its leaders are inexperienced?

If a startup finds itself in this situation, it’s probably time to consider hiring outsiders to fill important positions. Emma explains that while qualifications are important in a job candidate, so is fitting in within the established company culture. Moreover, current employees need to buy in to the idea that someone with outside knowledge is coming in, and it will benefit the team as a whole.

Salary requirements of an experienced outsider can be especially difficult to navigate. Emma suggests determining salary by “experience, external experience, and then experience potentially in the tenure of the company, by education level, by skills” so that there isn’t too large of a disparity between a new and incoming employee.


Using Additional Resources

Starting from scratch on anything is difficult, and as a business, it can be overwhelming. There are so many facets to a company that it becomes impossible for one or two people to run everything. For many, it’s helpful to use a professional employer organization (PEO) as a framework to shape the HR department. Especially if the company has 50 employees or less, a PEO can be a great way to not have to reinvent the wheel and start completely from the beginning on structuring a company. A PEO will provide access to a network of people as well as information necessary for running a business smoothly.

Additionally, hiring a benefits broker for compliance issues can significantly ease the burden of your HR Director. Because compliance laws are constantly changing, it is very difficult for a general HR Director to continually keep track of such revisions, but it is much easier for a person whose entire job consists of being informed about compliance. By hiring a separate employee other than the HR Director for this position, your company can streamline information and make sure that everything remains legal.