Running a successful startup is a constant lesson in letting go. When you build a business from the ground up, you’re used to having a hand in just about every decision – from hiring, to operations, to how to decorate the office.
You scrapped and fought to bring this business into the world, and handing over the reigns isn’t easy.
Managing human capital is one of the most difficult parts of running a business, and something you can’t afford to screw up. Once you’ve built a strong core team, you’re not going to have time to pore over resumes, try to decipher state and federal regulations and get into the nitty gritty of salary and benefits. Enter, the human resources manager.
Is it time to hire an HR manager?
The biggest selling point for an HR manager is that hiring one is going to save you time, save you money and keep you compliant. An HR manager can also help you create and manage a successful company culture that ensures consistency both in the workplace and with your product.
To put it in more practical terms, an HR manager is going to save you from hundreds of emails, dead-end interviews and, oh yeah, lawsuits. If you’re not sure whether it’s time to commit to a full time HR person, ask yourself these questions.
1. Is hiring getting in the way of operations?
Startups are experiencing explosive growth. Each job listing you post is going to be hit with a flood of applicants. For example, the Bureau of Labor Statistics projects a growth of 17% in software developer jobs over the next few years. For comparison, the growth of all jobs in the United States during the same time period is only 7%.
When all of these resumes hit your desk (or, more likely, your inbox), you have two options. You can:
review and vet every applicant to find the perfect fit for your business or
hire the first candidate that looks good and can start right away.
The first option is impossible for a busy entrepreneur and the second could make for huge problems down the line if your applicant turns out to not be as good as he or she appeared on paper. An HR manager can properly vet every applicant so that you only have to meet the best of the best.
2. Is your company’s growth putting you at risk?
Once your business starts growing and taking on new employees, you open yourself up to a lot of legal risks. There are a slew of state and federal regulations that have to be met once your business reaches a certain size.
You probably didn’t start your own business with the dream of learning the ins and outs of ADA, COBRA, FMLA and a dozen other acronyms. The employee thresholds for some of these regulations are surprisingly low. Once you hit 15 employees, you’re expected to be ADA compliant, for example. An HR manager will ensure that your business complies with everything it needs to comply with and save you the expensive of a costly lawsuit.
3. Do you want to become a top company to work for?
Creating a cohesive and collaborative company culture is easy when you’re just getting started and everyone is working 12-hour days in the same room. Once you have your own fancy office and you’re divorced from the day-to-day goings on, maintaining that level of camaraderie and commitment isn’t so simple.
HR managers will not only hire people that fit your culture, but they will also maintain and grow that culture through internal initiatives. The last thing you want is a toxic workplace – it’s bad for your business, it’s bad for your employees and it’s bad PR.
On the flip side, companies that invest in building a great culture attract more competitive applicants and more loyal employees (for example, Southwest Airlines, long known for its great culture, has voluntary turnover of only 2%), with the added benefit of making you look good to the public. (How many fawning pieces have you seen about Google’s office environment?)
Hiring an HR manager is a big step in the development of your business, and not one that you need to rush into. However, it can ultimately be the difference between a business that keeps growing and one that’s crippled by turnover, gridlock and lawyers. It may feel like going corporate, but the right HR manager can keep your business running like a corporation, without losing that startup attitude that made it a success!
This article has been edited and condensed.
Lisa Mink, founder of Mink Enterprise Group, is an executive coach and HR consultant who advises individuals and companies from around the world. Drawing on over two decades of HR and executive coaching experience, Lisa hosts a variety of diversity and communication workshops, including leadership for young women leaders, career development for millennial workers and management techniques for new leaders. Connect with @lisa_mink on Twitter.