Curiosity killed the cat a few years ago when an enthusiastic entrepreneur asked a simple question on Quora, “Does a startup really need an HR department?” Startups were just figuring it out at that time, so it’s unsurprising that the first and most popular answer was, “No, you don’t need an HR department.”
From personnel department in the 1980s to human resources to talent management to people practice, the HR function has come a long way. Earlier, the personnel department was largely an administrative function, which included managing job cards, attendance, and payroll. Soon, it was all about making people comfortable and helping them grow in their professional life. During the 90s, the age of technology, people became an important asset for organizations. Earlier, most individuals were happy to retire in the same position they started in, but slowly aspirations began to grow. This sparked a beginning to the function, Human Resources (HR), which conclusively wasn’t scaling as it was restricted to function.
In knowledge working communities, people focused on how organizations would contribute to their growth. The question “How are you going to manage talent?” eventually popped up. The only solution was engaging them. This is when the era of talent management came in, where if an individual joined as a Marketing Executive, he would become the Senior Marketing Executive, slowly move up the ladder to VP and finally become the Marketing Head. We are now in this cusp of evolution where industry growth is fast-paced, and the new-age workforce are more aspirational when it comes to organizational roles. They would rather explore different functions in their company, than stick to one department lifelong. A people-centric organization ensures that employees don’t feel bored of doing the same thing over and over again. This is an individual-based HR function, which is why it is called people practice.
Most startups build their system without the existence of an HR department, let alone an HR individual. Individuals who have expertise in managing HR practices in the startup ecosystem are moderately low because most entrepreneurs/founders are not ready to invest in HR practitioners. The HR landscape for a startup is quite different from that of a large organization. An HR needs to be aware of the top 3 priorities that a startup is founded on — People, Product and Profit.
Large enterprises have global HR policies, which are tweaked to a certain extent for their regional offices. Since they have already evolved over a period of time and are quite established, even if they start up in a new country, the percentage of change is not going to be more than 3–4%. Let’s take the example of any global company, it would have a similar career or talent management practice in a new region. Probably, the policies would be customized a little for the Indian audiences’ needs.
But in a startup, one has to build policies from scratch and with the company scaling quite frequently, these policies need to be rewritten in most cases. Most HR practitioners in the industry today have not seen a considerable amount of scale, neither have they thought through on how to build policies from scratch. They have all copied someone else’s. Replication is not possible with startups, as it’s a completely new concept and the evolution of growth is quite profound. The kind of needs startups like talent capabilities and compensation vary a large extent from the early to the formation to the growth stage.
Another example is a Multinational company (MNC), where most of the time global HR policies are modified a bit to fit Indian needs. An HR professional or practitioner today in an MNC will have to moderately think of some of the tactical situations, but most of it is strategically driven by the global mandate. But it’s an altogether different case with startups that are homegrown in India and are not global in nature. A ‘copy-paste’ is not readily available when it comes to establishing policies. What a startup needs is someone who is open to understanding the nuances of working in a startup and is geared up to go through the grind with agility.
If you are working in big companies, you are already having biryani. It’s a full-service organization and you are glad that someone comes and tell you what to do. But in a startup, you need to get used to staying in different rooms, eating curd rice and making your own coffee (you heard right, coffee machines don’t come easy!) to keep yourself up.
From the HR practitioner point of view, it’s important to view every employee as an individual entity and create a career for him during the evolution of the startup. The growth doesn’t have to be vertical, as is the case in most large organizations. Why can’t a Marketing Manager become a Product Manager? Why can’t an SEO Writer move to Social Media Marketing? Who says an Engineer can’t get the opportunity to explore Marketing as well? Ultimately, the individual’s ability to learn, unlearn (if necessary) and execute is all that counts.
This also brings in a new dimension of talent acquisition — how do you evaluate individuals and nurture talent? While large organizations have perks and benefits that sometimes steers employee retention, in startups, you need to engage an employee with a purpose and why exactly are they working for the company. Today, only a handful of companies like Facebook, Google or Apple are hitting the mark. For others, employee engagement is less than 50% globally because the company’s vision and purposes are not communicated well.
New-age HR practitioners should have the natural flair to come in and make the process seamless for the entrepreneur, whose is actually focusing on his product, profit, and go-to market. As far as compensation is concerned, startups don’t offer much to an HR Professional as compared to large companies. Pay is of course an important factor when considering to join a company, but it falls second to the many other benefits startups have to offer. There’s a clear visibility of how you’re adding value to the company, without getting lost in the crowd of 1000s of people. DNA is what matters- you need to have the fire within you to get things going and create an impact.
There are a large number of HR practitioners or people practitioners sitting and working in the ecosystem of large services or products companies. But, there’s a lot of gap in terms of talent available for startups. It’s not just about filling the shoes of an HR practitioner and creating policies. You need to have the ability to manage, maneuver, and scale. If the company initially has 200 employees, the decisions and policies created at this stage should not be a challenge when they scale to 1000 or 5000 employees in the future. Most HR practitioners don’t have clear visibility on what the startup scenario looks like. They don’t foresee the 200 percent growth when they join, neither do they think ahead.
As a part of our #LearnAtAccel initiative, we want to bring the best HR practitioners and entrepreneurs of the industry to participate and be aware of the current HR complexities and challenges faced by a startup. In turn, they can impart their knowledge with startups who are keen to learn best practices from the experts themselves.
If you’re a midlevel manager or people practitioner, inclined towards learning and working for startups, the #LearnAtAccel program is just the place you need to be!
LearnatAccel is scheduled to take place on June 28, 2018 at Accel office, Bangalore from 2.00 pm to 5.00 pm. To register click here