Whether you're a start-up or scale-up, investing in HR is your secret weapon for sustainable growth and performance.
Things are going great guns now, but you need to start thinking about your people processes and cultural practices well before you're a team of 50.
From establishing the right processes and policies to nurturing talent, we’ll uncover the role of HR, People + Culture in your business, and offer tips for how you can use HR to gain the edge on the competition.
Let's be honest — the term HR, is very unlikely to get you out of bed in the morning, and its associated transactional connotations are probably likely to annoy you, we get it. For us, it's about People + Culture more than anything and we do see it as something different and better than the HR of old. And it seems we're not alone, as studies show that nearly 2 in 5 HRs in start-ups now opt to use 'People' in their job titles. And we’re hoping it isn’t just a name change!
But whatever you want to call it — whether it's a VP of Talent, People Lead, or a good old HR Manager — these roles are the backbone of your company.
From recruiting, developing, rewarding, and retaining top talent, to crafting policies and practices essential for any business primed for growth and performance, investing in People + Culture is investing in your company's future.
Plus, these days, HR doesn't have to be (well, it really shouldn’t be) the stuffy, red-tape-loving department it's often made out to be. It can be as scalable and flexible as your business itself through the use of fractional expertise and through its focus on impact.
So whether you have a team of 10, 20, or more, putting the right organisational practices in place can ensure that your team remains your competitive advantage, and you avoid huge roadblocks along the way.
Does a start-up actually need HR?
You might think that HR is just something for multinational companies with sprawling corporate structures and budgets to boot. After all, start-ups are known for their agility and scrappiness – so why bog them down with HR bureaucracy? [eye roll]
This train of thought is probably why nearly two-thirds of start-ups have no dedicated HR support. It’s clear that founders with bad experience of HR will typically try and avoid what they see as a cost centre; but speak to second and third-time founders, and you’ll hear that they will bring in a People person as soon as they can!
But for big businesses, HR is often there to mop up problems. They have the processes, the infrastructure and the systems in place to make HR mainly focused on coordination.
But for you, there’s fewer issues. Things are quicker, they’re slicker. But… there’s more at risk.
That’s because with every single thing you do that relates to your People + Culture, there’s a multiplier effect.
So as you sit there with a team of 20, 30, whatever it may be — the things you’re not quite getting right, will get worse as you grow. And other scaling challenges will appear unexpectedly before your very eyes!
So, if you have an issue with your internal communication, or if your approach to managing performance isn’t quite up to speed then, as a team of 20 people, it’s easy enough to solve. Once you hit 40, 50, 60, it’s going to be a kicker.
When’s the right time to invest in HR?
In a word: now. Or at least, before you feel like you really need it.
Investing in HR early on means that you’re setting up good habits while it’s easiest to do so, and letting them grow alongside your business.
Put simply, it’s better to build something that works brilliantly, than it is to fix issues down the line.
You wouldn’t build a house without an architect… Well you could try! But you’d eventually find yourself surrounded by buckets that are full to the brim, facing the nightmare of fixing a leaking roof and crumbling walls.
It’s the same with your business. Putting the right practices in place from the get-go means less hassle and better results down the line. You can build and iterate over time, but you’re starting from 1, and not 0 when you need them. If you wait until things are really biting, it’s going to be much harder to do.
Unlocking success: 10 key roles of HR in your business
Working with an HR or People expert will mean good things stick. It means making them better. It means finding what works, fixes what doesn’t, and moulding great practices to grow alongside your business.
This doesn’t happen by accident.
It’s your chance to put the rituals, rhythms, processes and practices that you want to see in your business.
From the way your team takes time off work to how they’re rewarded for success, this means that the things that are currently second nature to you, can be built into the foundations of your business and set in stone as you scale.
Whether as a permanent member of your team or a People Leader embedded into your company on a fractional basis, good HR expertise offers a range of benefits to your company.
This includes:
1: Minimising risk / Maximising Opportunity
As a Founder, you probably have legal advice, financial advice, business advisors and even a mentor who has done it all before.
But what you might be missing from your safety net is someone who has expertise in HR and people processes.
This is someone who can offer you informed challenges around the way your business works. They help you find the ‘why’ behind your team’s performance, they show what you could be doing better, and allow you to amplify the things that are working well.
All while spotting the things that could potentially derail your business as it expands, it also helps you to create a strategy full of opportunity.
2: Successful hiring and onboarding
When you first started out, you probably hired people from your own network, with onboarding being a casual chat with someone you knew well. However, as your business progresses, this stops becoming an option.
People + Culture pro’s can lend their expertise to attract top talent to your company through effective recruitment strategies, employer branding, and prioritising a positive candidate experience.
The way you shortlist, interview and onboard a new hire into your business not only gets higher-quality candidates through the door, it ensures they hit the ground running and remain with the company longer.
Even more crucially, working out the right structure for your leadership as you grow, and hiring the right people for it (bearing in mind that 50% of leadership hires leave in the first 18 months), getting this right is crucial!
3: Competitive, commercially viable salary and benefits
You live and breathe your business. But for those on the outside, a competitive salary and benefits package is going to be a key factor in whether they take the job..
An experienced HR pro can design and manage the package you offer, helping you to be sure they meet market demands as well as your budget — keeping it equitable internally with good levelling too.
4: Robust performance enablement
Performance enablement not only supports the development of each employee – it outlines what’s needed from everyone on the team to achieve your overarching goals. Each person’s objectives should be clear, time-sensitive, realistic, and directly aligned with your company’s overarching targets.
To keep members of the team engaged, it's crucial to establish an effective way of providing feedback. Forgotten targets are of no use to anyone, and if everyone’s just busy doing their own thing, you’ll lose ground on the competition.
While managers will play a significant role in this process, leveraging the expertise of a People pro can ensure a consistent and effective approach to performance reviews, goal-setting, and feedback — ultimately ensuring growth and performance of the business.
5: Prioritising learning and development (L&D)
As your business develops, you need your team to do the same. During this phase, your employees will take on new roles, expand their skill sets, and tackle fresh challenges.
Research from The Association for Talent Development has found that companies investing in training enjoy a 24% higher profit margin than those that don't. With the right support from a HR expert, you can implement effective and practical training programmes that make a real difference in the way your team works.
It’s also worth noting that a dedicated focus on L&D also aids in hiring and retaining top talent with as many as 92% of people using it as a deciding factor in making career decisions.
Basically, with a commitment to L&D you can attract better-qualified people, and make them even better.
6: Filling the people gap on strategy
Teaming up with a People expert, whether in-house or on a fractional basis, allows you to strategically map out your workforce's future. They can anticipate your needs and align your projected growth with your People strategy, ensuring you're primed for what lies ahead.
This involves crafting an org structure that offers clear paths for progression, smart resource allocation, and seamless scalability as your business develops. Plus, they can embed the right succession planning and talent pipeline for key roles, reducing the risk of disruption if someone leaves the business.
7: Fostering diversity, equity, and inclusion (DE&I)
A diverse workforce is proven to be more innovative, more appealing to new hires, and ultimately, more profitable.
A People + Culture expert can be crucial for your DE&I efforts. Be it introducing inclusive hiring practices, relevant training or company-wide policies, they are able to create a welcoming and supportive environment for employees, regardless of their background.
With McKinsey finding that 2 in 5 people have decided against taking a job due to their views on the company’s approach to DE&I, this is not only beneficial for your productivity and bottom line, but for ensuring a varied, and valuable, talent-pool for years to come.
8: Managing change
During periods of rapid growth or restructuring, having skilled HR expertise is a no-brainer. They play a vital role in facilitating organisational change by developing communication plans, providing ongoing support to employees, and ensuring all processes are above board.
They are able to promote a culture of resilience, helping you and your team to navigate unexpected changes smoothly, ensuring that your team reacts well and continues to thrive come rain or shine.
9: Cultivating culture
Establishing a strong company culture is vital to the success of your business.
A dedicated People + Culture expert can work with you to foster a positive and inclusive culture that aligns with your company’s values. They are on hand to resolve conflicts, address concerns and to dedicate the time and headspace needed to building a fantastic place to work.
The benefits of this are huge with over half of jobseekers valuing culture over salary when considering a job offer, and with improved engagement, productivity and employee buy-in, research shows that companies leading in culture have 25% higher profits than their competitors.
Don’t forget, culture isn’t about pizzas and social events. Your company culture is a tool that you can leverage to help mitigate problems and achieve your goals.
10: Comms that create change
How you share information internally is essential for building trust and understanding within your team. Internal comms connect, inform, and engage employees with what’s going on in the business.
Whether it’s showcasing success, promoting company values, being able to run interactive and engaging meetings, or sharing operational updates from leadership, having someone dedicated to crafting engaging and impactful messaging is crucial for getting the most out of your growing team.
Why you should consider a fractional People leader
If you’re just starting your HR journey, you should consider working with a fractional People pro. You might be growing your team, building a culture, or looking to retain top talent, but that doesn’t necessarily mean you need 9-5 / 5 days a week fixed cost internal HR.
Through a fractional leader, you can benefit from highly focused HR and People expertise where you need it most, and save on the cost of a full-time hire.
Final thoughts
To wrap things up… HR, People + Culture is not just a support function but a strategic asset for any business.
By leveraging the expertise of a HR pro you can protect your business and make sure that the team you’re building is the one you intended to build.
Remember, your people are your greatest asset, and by prioritising their well-being, development, and engagement, you're setting your business up for long-term success.
Navigating the next phase of your business journey? At Foundation Partners, we can be your compass.
Get in touch to find out how we can help.