5 Biggest HR Blunders Start-Ups Should Avoid

August 20, 20158:05 am639 views

Setting up a good HR team is challenge for many start-ups. The best ways to avoid blunders is to appoint the right people with pre-requisite skill sets for the right job. A start-up can only be more successful if they have a fast and agile workforce. It is important for employers to treat HR function in the same manner.

Any great enterprise can crash down to nothing if you do not have senior business unit leaders and top executive management in place. Hence it is important for HR managers to win support of leaders and buy-in top people with experiences to manage smooth functioning of business operations.

Here are some of the biggest HR blunders made by start-ups during their founding years:

  1. Under-hiring for skills required to set up a professional HR team

Most start-ups wind up too soon because of the most common HR pitfall – they tend to under-hire for the level of skills required and recruit people with less understanding of the subject and less experience.

Since most hiring managers or recruiters in start-ups possess high-energy levels and are enthusiastic about their new role, they rely heavily upon agency hiring, contract hiring and those kinds of mechanisms to find the perfect recruit for the job role.

  1. Giving away too much equity

While there are situations wherein giving away equity to cofounders and reliable staffers makes strategic business sense, however in most cases it is advisable for HR personnel to not be lured to give away equity to CFOs and executive appointments on board.

This can soon turn out be a pricey business opposition for growing start-ups in the longer run. Using equity as a currency, when the business is at its lowest value means paying huge dividends indirectly to all stakeholders in the near future.

See: Human resources hacks for the bootstrapped startup

  1. Bringing on new partners without careful thought

Partnership is like being wedded onto a deal for a long-time period. Many partnerships grow sour as the business expands through years, primarily on financial grounds of differences that seep through a clearly-defined business relationship.

It is advisable for HR managers to better contract a person for their skills, rather than bringing on more partners to their business enterprise. There should be a tactical reason to partner with someone, take time to well define your partnership contract, before you enter into an agreement.

  1. Hiring friends for trust and success

Do not hire someone because he/she is your friend. Evaluate the individual to understand if he/she is the right talent, you need to hire as a part of your start-up team. Hire diligently as employees can make or break your reputation in the industry.

Conduct interviews treating friends as candidates and review their skills to see if they fit the cultural values and share long-term business vision and passion for success. When hiring friends, the tendency is to generally hire fast and fire slow. In most cases, it is best advisable to avoid hiring friends.

  1. Trying to do HR yourself

Most start-ups get into trouble, when they try to save on costs and end up doing HR themselves. The problem arises when they do not know what they are doing, and if what they are doing is right for organisational growth.

Never assume the federal and state government laws will allow you the privilege to plead innocence, if you fail to abide by regulations and compliances.

Before hiring independent contractors and employees on board, it is important for a business to get facts right and understand legal implications. Employment rules can be complex, hence it is in best interest to seek guidance from a trustworthy HR consultant/professional who can address your needs and prove cost-effective.

To conclude

While start-up owners are generally worried about business costs, marketing expenditure and other miscellaneous expenses at onset; however saving on expert services of a HR professional will only allow leeway for inviting futuristic risks to a new business.

An emerging enterprise with long-term strategic vision should streamline their HR procedures and optimise smart hiring to recruit best talent on board cautiously.

Also read: 7 HR Primary Blunders on Employee Retention

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