The idea of startups isn’t new, but the way startups work, has changed over the years. Currently, there are two kinds of startups. First is the one with limited resources, that has to develop everything from scratch. The second is the venture capitalist-backed startup that usually has pre-developed processes and lots of resources. However, both require an HR strategy for startups.
Startups tend to be smaller in size and scope, and the HR strategy for startups tends to be different for each company. Every organizational strategy has to be specifically tailored because each company has different values, goals, and process.
The following HR strategy points for startups can help you get started.
Develop All-Rounded Compensation Strategies
The difference between successful and unsuccessful companies is how satisfied their employees are. Having a good and fair compensation strategy ensures that your employees are happy and satisfied and it also makes your life easier, since you can then dictate a fixed yearly cost.
To develop a good compensation strategy, you can look at your historical records, if any. You then have to look at the compensation strategies of your competitors, as well as others in the industry, which will then give you an idea of the latest compensation plans.
To have greater fairness and equality in the workplace, you should predetermine compensation requirements that would dictate how employees in different paygrades are compensated.
Legal Employment Practices
It’s not uncommon to see small business owners jump a few hoops with proper employment practices. You need to understand that regardless of company size, you need to keep your practices within legal realms and follow all the rules and regulations.
If you understand all the employment laws, labor laws, and union laws, you will most likely make the right decision at all times, and will be safe from bearing the consequences of any violations.
To make sure you have everything under control, it’s best to hire a legal specialist or a seasoned HR professional, to make employee guidelines for you.
Improve Employee Satisfaction
Employees are a company’s greatest asset, especially for startups. Employee retention is very important for startups because you can’t bear a stoppage in your work, and it’s a waste of resources to invest in recruiting repeatedly.
That is why it’s important to make sure that all of your employees remain satisfied and happy with their roles and work. You are bound to notice higher productivity, improved morale, loyalty, a greater sense of commitment, and lower employee turnover.
You can improve employee satisfaction through monetary and non-monetary means. Depending on your resources, you can either tweak the salaries or provide more, better, or unique employee benefits.
Design Professional Development Programs
Another way to increase employee retention is to invest in the professional development of your employees. If you create a culture of growth and development by designing and offering constant training and development programs, you are bound to retain your employees.
As a startup, you can’t hire the best of the best, unless you have the resources to do so. However, you can help all of your employees grow and become the best. This way, you have the loyalty of all your employees, you have a team that enjoys working together, and you get to retain most of your employees.
Additionally, providing professional development opportunities can be a two-way street, benefitting both the company, and the employees.
Choose the Right Approach
One of the most important decisions you need to make when making an HR strategy for startups is to choose whether you want a reactive or proactive approach to human resource management. The difference between the two is usually related to planning.
Proactive HR management will help weed out any problems, and will help in employee training and staffing. Reactive HR management, on the other end, will save the company a lot of money, but will only help in reactive measures and situations.
The same is true for things such as adhering to the needs of employees and the company itself, risk management, employee benefits, and overhead costs. Proactive HRM will always ensure that you are ready for different HR-related processes and issues, at the cost of being expensive.
Reactive HRM will only provide help after something has happened. This will most likely be an issue when there are no preset measures in place and an issue pops up. However, reactive HRM is cheap which means that it would be a better choice for startups.
You need to understand that startups require a whole different amount of attention, and that creating an HR strategy (compounded by HR software and proper human capital management) for startups can ease up your life a little bit. It’s best to have a detailed process in place so that you can focus on more important things.
The aforementioned points are uniquely specific towards an HR strategy for startups, but that doesn’t mean there isn’t more. You should start with the points but also try to be more thorough and make a decision based on your company’s goals, mission, vision, and values.