What Every Entrepreneur Should Know About HR And Startup Culture

It is enough of a struggle to grow a company. The last thing you need is to manage HR functions by pen and paper and/or face stiff government...

When your startup is ready to grow and scale, hiring new employees and building the right team is mission critical. And while HR isn’t the job you signed up for as a founder, the right HR technology can help you get up to speed and manage employees with greater ease.

The aim of HR technology is to create a fundamental transparency between you and your employees — providing balance between your responsibilities as an employer and the rights and privileges of your employees.

When you put best practices in place, your employees feel like you “have their back” and you can gain more than just a sound level of compliance — you can create a culture of genuine trust and respect.

Using apps and technology to manage your HR responsibilities can help prevent and eliminate circumstances where employees are needlessly impacted by poorly controlled processes. It’s hard to build a lasting culture based solely on foosball and free lunches. The fundamental employment basics need to be there.


The role of HR in startup culture

Over my years as a startup founder and a provider of payroll solutions to thousands of small businesses, I’ve gathered a few observations on the role that HR systems play in forging a strong culture. Here’s an inside look.



You are an entrepreneur, but you are also an employer

Entrepreneurship is grand, but if you hire even one full-time employee, you are also an employer. You have a responsibility to ensure that your people get paid accurately and on time for the hours worked. It is also your duty to make sure that your payroll taxes are paid correctly. This also means staying on top of regulations and compliance demands at the state and federal level.


How much does it cost to renovate office space?
Photo: © opolja, YFS Magazine


2. Accuracy matters, especially in payroll

Whether you have opted to outsource payroll to a vendor or you’re the one paying everyone with the help of payroll software, the onus is on you to guarantee that taxes are set up correctly depending on where you’re doing business and that the right amount of taxes are being withheld and reported.


3. Tracking paid and unpaid time-off is essential

Time-off is an important and valued benefit. It shouldn’t be left to employees to track and manage on their own. A vacation tracking system is usually an afterthought for small companies. Many founders just don’t think of tracking this stuff.

The thing is, people are human. They are busy doing their jobs and managing their lives. At some point, some form of informal tracking, like a spreadsheet, is put in place. 

Unlimited vacation time is one perk many startups use to attract talent.

In this situation, employers often believe there’s no need to track anything because, well, it is unlimited time off. However, as an employer, it is important to understand that you are on the hook for proving that employees took the time off they are legally entitled to, which is where a vacation tracking system comes in handy.


Photo: © opolja, YFS Magazine
Photo: © opolja, YFS Magazine

Imagine if your employees could request vacation or personal time off with just a click of a button. Balances are automatically updated and managers are automatically notified so that they can approve/deny vacation. Everyone — employer and employees — would have real-time balances that show how much time they have left in their time-off bank.

HR technologies that help you automate this process are invaluable. It’s one less thing for you and your employees to manage, plus you have accurate paid time off records. It’s a win-win situation for everyone.


4. Employee benefits should be easily managed and accessible

Do you have an online benefits management system for you and your employees to access their retirement and insurance benefits from one secure location? Can you provide your employees with more insight into their benefits plans?

Access to massage treatments or chiropractic treatments are great employee perks and certainly appreciated, but they can also be an administrative nightmare, unless your employees can easily access their benefits handbook and/or a history of their claims.

Are you using 401(k) plans with vendors that have a similar philosophy around transparency? Just as employees want to track their accrued vacation time and benefits allotment, they’ll want to be able to easily see what retirement savings they have accumulated and how those 401(k) contributions impact them at tax time. 

It’s absolutely true that startups need to think more and more about culture.


5. Let your employees know they are respected and valued

From time off when your team members have worked their asses off to make a release deadline and team building events to celebrating birthdays and recognizing personal milestones, the little gestures that build a culture are very important. These are all ways to let your employees know that they’re respected and valued.

But, if you can’t provide transparency and easy access to basic HR needs (i.e., easily track vacation days, record benefit drawdowns or make payroll on time) the employees you worked so hard to recruit might just become resentful and jump ship.


It is enough of a struggle to grow a company. The last thing you need is to manage HR functions by pen and paper and/or face stiff government penalties if you get it wrong. 

Fortunately, there are a number of apps and cloud-based solutions emerging from the startup community built to solve these problems and offer employers and employees a more integrated and transparent view of their HR world.

Better visibility into payroll, vacation, benefits and other important aspects of employee compensation provides an unspoken level of trust that builds strong relationships, creates a solid foundation for business growth and propels an enduring and compelling company culture that will attract and retain top talent for years to come.


This article has been edited and condensed.

Leena Thampan worked for some of the big guns in the media industry before deciding her true calling was to be the ultimate curator of Wagepoint. This is their version of the story, of course. She spends her days cooking culinary masterpieces from all over the world. And if you are not really careful, she might just offer it to you. Connect with @wagepoint on Twitter.


© YFS Magazine. All Rights Reserved. Copying prohibited. All material is protected by U.S. and international copyright laws. Unauthorized reproduction or distribution of this material is prohibited. Sharing of this material under Attribution-NonCommercial-NoDerivatives 4.0 International terms, listed here, is permitted.


In this article