Most startups are rightly focused on two key projects – product development and raising capital. All too often, however, startups neglect HR-related needs, which they see as less critical to the success of the venture.
This oversight can get your company in trouble, so here are three HR-related things every startup needs once it moves beyond its founders and starts bringing on employees.
An employee handbook lays out company policies for employees; covering benefits, conduct in the workplace, and culture. While it may seem like overkill to have an employee handbook when the company consists of only two founders and one employee, the handbook can be an essential tool in establishing and maintaining your desired company culture.
An employee handbook also communicates company policies on key issues such as workplace discrimination and sexual harassment, when the failure to have a clear policy can have serious legal consequences. Of course, the employee handbook is a work in progress, too, and as the company grows in size and resources, the handbook can always be revised to reflect the company’s growth and development.
A growing trend among companies of all sizes is for employees to use their own laptops, tablets, and smartphones for business purposes. BYOD, or ‘Bring Your Own Device’, is particularly widespread in the startup world, where a company may not have $10,000 sitting around to spend on laptops and smartphones to issue to employees.
The problem with BYOD practices, however, is that all too often, no thought has been devoted to ownership and control of the data stored on the devices. An employee’s personal laptop could contain crucial intellectual property, customer information, or financial projections that belong to the company.
A BYOD policy should outline what happens when an employee leaves the company, including whether the company has the right to remotely wipe data from the device. Another BYOD issue is technical support. If some employees use Apple laptops, while others use PCs, and you have some employees using iPhones and others using Android phones, there will be a lot of problems in supporting and maintaining all the different hardware, operating systems, and software.
A third issue is security. Obviously, you want to ensure that any company information on the devices is secure from prying eyes. At the same time, employees will have their personal information on the same devices, and want to ensure that such information is not available to the company. Need more help? I have written more about BYOD policies here.
IP Assignment Agreement
Don’t forget about intellectual property (IP). Every employee should sign an IP assignment agreement stating that any work done for the company belongs to the company, regardless of whether that work is performed during normal working hours (whatever those are) or in the evenings or on weekends.
A good IP assignment agreement also should state that any IP developed that is related to the company’s business belongs to the company, even if the employee did not create such IP as part of his or her specific, assigned duties.
If you’ve seen the movie, The Social Network, or are familiar with the dispute between Facebook and Mark Zuckerberg, on the one side, and the Winklevoss brothers on the other, you know what I’m talking about. Having such agreements in place for each founder, employee, and contractor also will be required when the company starts to seek outside funding.
While it may seem like HR issues aren’t critical areas for a startup to focus on, these three items can be essential building blocks for the startup as it grows.
Paul Spitz is an entrepreneur and business attorney, based in Cincinnati, Ohio. Paul’s practice, the Law Office of Paul H. Spitz, is focused on providing transactional business law services to startups, entrepreneurs and small businesses. Paul started and ran two businesses before opening his law practice in 2013. Paul has a law degree from Boston University, and an MBA from Indiana University.