8 Pivotal HR challenges faced by startups

In a startup, the HR decisions play a significant role which involves – providing legal protection, roping in top talent, managing employees record, creating foolproof HR policies, enabling organisational learning, intentionally nurturing a culture in the company and so on. None of these however are accomplished without passing a number of hurdles.

Today we discuss such common pivotal HR challenges faced by startups.

Challenge #1 Recruiting real leaders

Problem: While recruiting for the roles after C-suite, startups have a tendency to find people that are really good at what they do but leave out how well they can lead a team or engage employees in the vision. Leadership skills are hardly assessed while recruiting for leadership. 

Solution: During the interview process, find out if your candidates are proven leaders. Make it one of your interview objectives. Here are some sample questions you could ask.

  1. Who are your favourite business leaders and why?
  2. Do you take work home with you?
  3. How do you define success?
  4. How do you approach decisions in uncertain situations or when you don’t have enough information?
  5. When was the last time you resolved a conflict in the team and how did you do it?

You need people that can lead from the heart, leaders who believe in your vision and can take it forward. If you can find passionate people that have goals and motivations beyond self interest, you’ll be lucky to earn the forever loyalty of the teams that function under them.

Exceptional leaders care about their people, own their circumstances, thrive in uncertain situations and can always chase a vision. They are always learning and leading, both at the same time.

Challenge #2 Attracting the cream of the crop

Problem: Startups have multiple challenges staring in their face when it comes to attracting talent. In the initial days, there are not many people that know about the company, there is usually no dedicated HR personnel, the management is hesitant to invest in an ATS software or recruitment software, there is a slight lack of clarity in the roles one is hiring for and the list goes on.

23% of startups fail because they don’t hire the right people at the right time.

Solution: 1) Referrals work magic for startups! Get your employees to talk to the people they know. There is no one better than your own employee to tell your story and rope in another one. Reward referrals. Create a process that is transparent and make sure people can see what the status of their referrals are. 2)Be open to hiring and investing in people.  You may not find the perfect people for your roles but you can always hire passionate and smart people that are willing to learn and grow. 3)Invest in the right tools to help you reach the right candidates, manage them and give them an impressive candidate experience.

Challenge #3 Creating foolproof policies

Problem: Startups don’t focus on drafting or communicating policies as much as they care about building their products and getting them to the market. They always tend to think it can wait.

Policies are however very vital and need to be a part of the foundation. Time of policies, sexual harassment policies, equal opportunity policies, expenses policies – your policies are the invisible fabrics of the culture you are trying to build. They tell your employees what you stand for and how you’ll function collectively. In a moment of conflict, you can always turn to your policies to have them justly resolved.

Solution: There is simply no shortcut. Create them! Once you start creating them, you’ll actually realise they don’t take much time. There are so many templates available online. You can always invest some time in perfectly tailoring them to your needs. Run it by a lawyer or your legal team to ensure they comply with the law. If they do then you are immune to all legal and compliance risks.

Challenge #4 Communicating the company policies to employees

Problem: They are never there in the first place. Even if they are, they are mostly invisible. 

Solution: Make them visible. Show your employees where they can find the policies and make it accessible at all times. The best way to communicate your policy is by practising it. In many companies policies are there just for the sake of it. What happens when somebody doesn’t comply with them? What measures have you taken to ensure that every employee is completely aware of them? Have they been genuinely drafted in the interest of the company and its people? Ask yourself these questions. A little reflection can always help.

Challenge #5 Building a culture that you meant to build

Problem: The biggest problems around startup culture are the assumptions and myths. 1) Top management assumes that their values become company values and culture too. 2) Culture will form on it’s own. 3) You pick something that sounds fancy and has nothing to do with your convictions as a company.

Your culture affects your employee’s choices, decisions  and performance at the workplace, the public’s perception of you and your customer’s trust.

Solution: Be intentional about it. If you don’t intentionally build a culture, it’s going to form on it’s own. When it does, it won’t be culture but chaos. Culture is more than just posters hanging over water coolers and stickers on laptops. It’s the values each employee in the company agrees to never compromise on. It’s the reason there is trust and honor in the atmosphere. It defines the ethics through which you make profits or bring in revenue.

Put your core values in words, not just the values but also why you care about them, the convictions behind each one of them. Communicate it time and again. Reward employees that uphold these values. You can go one extra mile and even make it a part of their yearly performance evaluations.

Challenge # 6 Handling terminations with grace 

Problem: In startups employees tend to be very close to each other. This makes it uncomfortable or bitter when you have to let an employee go.

Solution: There are so many things you can do to help them make the transition with joy and dignity. Give them a heads-up, no one wants to be fired out of nowhere. Be honest about why you are doing it. Write them recommendations. If they are leaving for a better opportunity, one you’d never be able to offer, then wish them luck.

How you treat your leaving employees says a lot about how much you care about the employees that still work for you. 

Challenge #7 Efficiently managing the time-swallowing HR routines

Problem: HR personnels spend almost 60% of their time doing redundant tasks like follow ups, coordinating interviews, doing paperwork, etc. All this time could actually be used in more strategic planning to gain a competitive edge.

Solution: Investing in the right tools to create efficient processes. For example, an ATS helps streamline the end-to-end recruitment activities and even automate recurring tasks like screening and follow ups.

Startups dodge software-buying decisions until it’s an absolute necessity. That’s however a wrong way to approach things. People take time to adapt to processes and tools, and flow with them. This time period has to be accommodated in software decisions. And also the fact that a lot of time could be spent on more important things like creating policies, aligning employees with the organisational vision, employer branding, etc. 

Challenge #8 Onboarding new hires 

Problem: Onboarding is usually very casual at startups. It begins and ends over giving them a laptop and taking them to lunch. As the business grows, this approach doesn’t scale.

Solution: Define measurable objectives for your onboarding and ensure that it’s achieved for your new hires. Startups attract a lot of referrals. Due to this there is a high possibility that people never make close connections beyond the people they already know. So create opportunities for them to know their team.

It’s good to let them explore things on their own about the product, process of the company but there should be some structure and plan to it. That’s the only way you can ensure a healthy time to productivity. Give them all the help and resources they need. Communicate their responsibilities and clear all ambiguities. Check in on them as often as you can.

That’s a wrap!

The right HR decisions and strategies in the early stages are a part of the strong foundation on which the company is built. They should never take the back seat.