Sunday, May 12, 2013

How to set up HR department for a start-up company

How to set up HR department for a start-up company? This is a discussion going on at the Linkedin SHRM forum for a week now. At least 62 comments I have seen have come from different parts of the world from people new to HR to the veterans (supposedly or the older lots, whatever you are comfortable with) and even those who are not HR professionals. Having read through majority of comments and suggestions against the topic, I certainly have come to simple assertions as below-

1. HR considers itself a master's order taker
2. HR believes in aligning to the business goals and objectives
3. HR considers it's task on conventional lines of the functions within HR or as any HRM book content list will read!

Very good and sensible suggestions have come in lines as listed above. Thoughtful and committed HR as it seems.

What I found missing was that everyone (almost) making comments forgot about, why this start-up has been set? The real objective. Is it just one more shop on the corner? Is it a start-up as diversified or strategic wing of an already established company or group. Is this start-up a related longitudinal expansion of existing business in similar or same business with different model or B2B or B2C or B2G or on-line or off-line? Is this a business started with just objective of making money, which would mean, enterprise by capital, for capital, with capital or it is an enterprise by passion of business, technology, or combination of capital, technology or passion?
It is very important to know the difference between a business and an enterprise. Similarly, it is important to understand, where people (employees) fit into the whole purpose and objective of the business or enterprise.

I certainly agree that any business can be an enterprise but not all businesses we can call an enterprise.

Many of us have heard " business of business is people", as Herb Kellehar of South-West Airline says.
Same may not be true for all businesses or enterprise.

A capitalist starting a business 'coz it is cool to be in that business and everyone else is there and the time is now and place is here concept, understanding of HR has to be built very carefully.

Reading the mind and model of business and position of people in the whole scheme of things is the real Game of HR. Frameworks, structures, models, policies, handbooks, Review and Reward mechanisms, career and succession planning are all copy-book. At the same time one size may not fit all. Organisations evolve and take shape and form organically mostly. The them selves keep discovering themselves and finding values and testing their models and measures of success over a long period of time. HR needs to be flexible and yet agile to accommodate the change.

The mistake start-ups make is in hiring or not hiring a real HR guy for very long and that really creates a very loosely structured organisation from people processes and culture perspective. Till the time a real HR guy or a set of HR team does not come into place, organisation is just what owner thinks, acts and believes like. Somehow, a kind of culture or absence of culture gets established in absence of real HR guy or a team. Power centers develop and people from on-screen to off-screen call the shots.

Hire the HR Manager first and hire the guy who can manage the anxiety and uncertainty to chaos very well from the beginning and becomes a key element into building the "critical mass". HR Manager should be your first few in the core team.

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