By Fernando Berrocal

When someone is working on a new startup, there should be little time to spend on not so important topics, which are different from the two main issues: product development and talking with the users of the product. Nevertheless, there are Human Resources (HR) fundamentals worth investing in when you begin to employ people and grow a team for your startup. That’s why HR procedures may assist your business in scaling rapidly and avoid unforeseen and often costly difficulties down the line. 

The individual who cares about others: Many entrepreneurs question themselves: "When is the best time to engage an HR professional?" There is no exact answer for this question but it should be after a Series A round. Bringing on a dedicated HR person sooner may make sense for certain types of businesses if they want to rapidly grow their staff or for other reasons, such as managing a non-exempt workforce.

In the absence of a formal HR department, someone on your team should serve as your "people's person." This individual is not a founder but rather serves as a sounding board or contact for your team. It's critical to have someone to whom your staff may go to express their concerns. This individual should have sound judgment, be perceptive, and be able to recognize when concerns need to be addressed.

This isn't to suggest that workers shouldn't be encouraged to interact with their founders; nevertheless, many employees are uncomfortable doing so and require another means of communication. Providing numerous possibilities for your employees to express their concerns can help you address issues more quickly and create a culture of openness and open feedback.

Hiring:  Since a robust hiring process is not required in the early stages, a few hiring principles can go a long way.  It's a good idea to employ someone to manage your hiring pipeline and keep applicants going through each stage of the hiring process. A great recruitment experience may be the reason a candidate selects one offer over another, and your hiring experience gives insight into your business culture. Closing the loop with rejected applicants is crucial since it demonstrates that you value their time and appreciate their interest in your organization.

It's a good idea to employ someone to manage your hiring pipeline and keep applicants going through each stage of the hiring process. A great recruitment experience may be the reason a candidate selects one offer over another, and your hiring experience gives insight into your business culture. Closing the loop with rejected applicants is crucial since it demonstrates that you value their time and appreciate their interest in your organization.

Second, during the onsite interview, develop a hiring strategy and a series of questions for each interviewer. When there is no internal interview plan, the same surface-level questions are asked over and over again. Each interviewer should contribute to the recruiting process by digging into various aspects of the applicant evaluation, such as cultural fit, soft skill assessment, technical assessment, management approach, working style, and communication.

Classification: Personnel classification has become a proposed approach in recent years. Your staff must be properly categorized. Regular full-time, part-time, temporary, and seasonal employees fall into one of two classification categories: exempt or non-exempt. W2 employees versus 1099 contractors and consultants are two other categorization groups. Keep in mind that, regardless of the size of your workforce, there are particular regulations for nonexempt employees regarding meal breaks, overtime, and holiday compensation that your startup must follow.

Payroll & Benefits: These are two of the most important aspects of a startup's operations. Employee benefits are a large part of a startup's operating costs. You don't have to offer a full suite of employee benefits from day one in the early stages but bear in mind that quality benefits are a major selling point for many potential applicants. Keep things simple when it comes to payroll. Use software to manage both payroll and benefits in one place. Examine the amount of backend administration required, available integrations such as 401(k), flexible spending accounts, and accounting services, and employee tools like dashboards, calculators, and online assistance when evaluating payroll and benefits providers.

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Handbook for the company:  The principles and procedures that govern your business are outlined in a corporate handbook. It lays out rules including paid sick leave, paid time off, parental leave, and other state and federal requirements. Each employee signs an acceptance form stating that they have:

1) Received the Handbook.

2) Have read and understood the contents.

3) Will follow the policies outlined in the handbook.

Onboarding - The Process of Bringing a New Employee: Establishing a clear onboarding procedure from the time a candidate accepts an offer to the time they start your business can give a great first impression and get your new hires up and running promptly. Some businesses utilize an "Onboarding Guide" to assist new workers to get up to speed.  An onboarding guide covers all you need to know about the team, including internal tools, where to discover critical information, employee benefits, and perks.

Terminations: It's inevitable for employees to quit, whether voluntarily or not. It's critical to have an offboarding procedure in place to guarantee that the departing employee receives their final salary (including any reimbursements, commissions, bonuses, and other benefits), that business equipment is returned, and that intellectual property is secured. A separation agreement lays out the terms of the separation and may include a severance payment. It's a good idea to get legal advice and make sure that your separation agreement is revised to reflect the current scenario.

Finally, departure interviews are a great method to learn more about your startup's culture and areas that need improvement. Exit interview feedback can be positive, negative, or even offensive at times. Having data points and examples of positive and bad elements of your organization, regardless of the form of feedback, is a significant bonus and may help you make important adjustments.

Ready to bring your startup to the next level? Apply to MassLight’s next batch. MassLight supplies capital and a dedicated tech team. We take equity in return. Have questions? Refer to our FAQ page.

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