Here’s what HR should really be doing for your new start-up

I recently received a comment on one of my articles about HR for start-ups, and I could immediately tell that I’ve struck a chord with start-up founders and CEOs in trying to communicate how and why HR can help your company.

This one particular person voiced concerns that likely represent many (comment somewhat shortened for this article). The message of the article was that HR can be your greatest ally. I will keep shouting that from the rooftops, because it has been proven time and time again that HR is a force multiplier and that’s very good for business.

Start-up CEO: “In hiring, I care about what people can actually do and get accomplished in essentially just technical work. To estimate what they might do in such technical work, I look at their technical backgrounds and accomplishments. By ‘technical’ I mean much of the best in the fields of STEM.

I fear as an employer, HR will shoot my recruiting in the gut. For helping to hire the technical people that are crucial for the organization, HR will be a disaster. Why? HR is full of ‘people’ persons and doesn’t understand technical work.

HR will have some rules: For candidates, smile and be nice. Ask no questions about qualifications. Never ask a candidate anything that might be related to their qualifications for the job. Help with benefits, expense accounts, where the rest room is, the interview schedule, etc. but under no circumstances communicate by any means opinions on the qualifications of the candidates. Help with coffee, tea, soda, water, smile and be nice. Help with lunch and dinner and smile and be nice. Offer a snack, a candy bar, some fresh fruit or nuts, etc. Be helpful with travel arrangements, hotel arrangements, and smile and be nice”

Let me tell you this — a high performing HR practitioner’s job is NOT to plan the office holiday party, ask no questions, then smile and be nice!

Honestly, if you believe this and then set your company up to operate like this, your company will fail. It should fail, because you are failing at leadership and are stiffling the power and authority of a critical business partner.

If you beleive that the job of your Head of People Operations is to plan the office holiday party, smile, and be nice, your company is probably going to fail.

We know, and it’s been the subject of much analysis, that present and future workforce coming out of college want to connect to their organization based on purpose. Graduates entering the workforce don’t care about money, they care about mission.

Work for a purpose, not a pay check

There are several factors to an individual feeling energized with purpose, many of which are firmly within the realm of what an HR person can enable and what they actually specialize in. The rest are things that HR can definitely set the groundwork for. These include:

• A company having and championing strong values that a candidate identifies with (what attracts a candidate to apply to a company in the first place) (In my experience as a military officer, I can speak to an individual sense of purpose and contribution to a greater cause. This is why military members are so loyal; they feel a deep sense of purpose. Companies have a harder time espousing the right values that make people feel that they are contributing their efforts to something worthy and greater than themselves).
• Fit within an organization (a sense of being the right person for the right job)
• Challenging work (engaging in work that is intrinsically motivating to the employee)
• Being recognized for your efforts (Feeling undervalued is actually the leading cause of stress in the workplace, and one of the top causes of turnover and low engagement)

HR has a dichotomous reputation — too “emotional” while at the same time being too process oriented. I understand why the reputation of being a “people person” is not always going to help build a rapport with very technically minded founders or employees. However, my explanation for this is that nearly always, HR practitioners make leaps in logic by talking about “emotions”. We leave out the data driven, best-practiced based analysis that we have gained through education, experience and data.

We know that good candidates lead to good teams → good teams get to tackle bigger and more engaging challenges → being challenged and engaged at work is what most employees consider to be high job satisfaction or happiness. HR knows that if you take away any of those steps, you get lesser results in the end (less productivity, less profit, less happiness).

If you think about it, HR is the only department within a company whose job is 100% focused on the internal workings of the company. Even the CEO has her attention divided between product development, sales and marketing, strategy, and vision of the future.

A good HR practitioner should focus on these strategies to help establish the foundation for a new start-up to achieve success —

1. Establishing HR KPIs

There are certain KPIs that have best-practice tested process-based solutions. Let’s take a look at just one of the factors that I listed that contributes to an employee connecting based on purpose — fit. There are many KPIs that can be used to get a sense of how, or if, the proper groundwork has been laid to set that employee up for success, and ultimately to cultivate their sense of purpose within an organization.

For example, consider the KPI of first year retention, a measure that I believe is going to continue to grow as a recruiting metric.

Imagine an HR practioner was spending about 50% of their time processing termination paperwork and 49% processing new hires. The other 1% trying to get everything else done.

If you knew, through data analysis you might see that approximately half of the turn-over happened not just within the first year, but within the first 90 days on the job. This company would exhaust hours recruiting, training (each employee often receives dozens of hours of training before starting work), and coaching, only to see all of that effort wasted. The data may also show that if an employee made it past the 90-day mark, or maybe the 120-day mark, they were significantly likely to stay for a year or longer. (Just like in sales, knowing that if a customer buys product 1, they are likely to buy products 2, 3, or 4 — you know you have to hook them with product 1 and work to convert them for future sales. Just like a customer who buys the wrong product for their needs and then complains about it is a waste of marketing effort, hiring the wrong candidate only to have them quit within 3 or 4 months is a huge waste of recruiting effort).

2. Internal Analytics

Using data driven analysis, it is possible to use leading and lagging KPIs to figure out what’s really going on within a company. A true HR professional first sets the correct KPIs and data tracking mechanisms, then analyzes the data, figures out the trends, and assesses the KPI performance. Then comes up with strategies and solutions to fix problems, or do more of what works best for the company. This is where we get the bad name of being too “process oriented”.

3. Using Data to make process/policy changes

There’s many solutions to these kinds of problems that HR can either facilitate or solve. Let me elaborate on the kinds of data-backed solutions that should be available to a CEO, to know that their KPIs are leading real process improvement and change within a company.

An HR practitioner could undertake any of the following stratgies to change that KPI and ultimately save the company time, money and very precious resources (make no mistake, employee turnover is VERY expensive to any company):

• A more realistic job preview- people leaving after 90 or 120 days is a big red flag indicating that the job doesn’t match what their expectations were. HR can set the stage for a more accurate job preview at every stage (job ad, phone screen, interview, job shadow, etc) Having unrealistic expectations (ie — not based on reality, not just delusions of grandure etc) leads to employee frustrations on day one. (My favourite example that I take from The Office (American version) — imagine being hired for the job “Assistant Regional Manager” only to find out on day one that you were actually hired to be the “Assitant to the Regional Manager”.
• Manager engagement in the hiring process- It’s a huge misunderstanding in small companies that HR practitioners lead the hiring process. A better description is that they enable and faciliate the process in areas outside of their expertise (highly technical etc), so that SMEs can ultimately make the best hiring decisions from the candidates that have been sought out for them. I firmly beleive that having managers who not only join in the selection process, but actually lead it, is key. SMEs who develop questions to probe candidate skills will always pick better people that can actually do the job required of them.
• Team engagement in the hiring process — An HR manager could also set it up so that their future team interviews them, or that the process includes a 2-day job shadow so that the candidate works directly with the team. Using those methods, the team can assess a candidates technical acumen, but they can also look at team fit. If a person feels like they fit in at work, they’re more engaged and less likely to bolt a few weeks later.

4. Assessing Business Weaknesses and Crafting Solutions

These same kinds of strategies can be looked at across many aspects of People Operations. For example, employee engagement is a big time worry of employers, who fear that they are losing up to 70% of employee productivity, because they can’t figure out how to motivate employees to care about working hard. Employee disengagement is also VERY expensive to a company.

The right HR processes take all of this data, and create plans and work flows with regular feedback loops to monitor progress.

5. Setting the business up for future success

Once a company is at the size and profitability to hire this person, they are thinking long term and big picture. The biggest gains from a dedicated person working in People Operations are in the future returns.

A truely valuable business partner focusing on people issues should be thinking, planning, envisioning and strategizing 3 months, 6 months, and 12 months out. If your HR team is focused on the day-to-day, they are getting stuck in the transactional weeds.

In that case, the priority should be in setting up the right supports so that HR can be a key player in helping the business meet its goals and growth targets.

Many HR practitioners are not given the right amount of authority to make changes. But even the most crusty CEO, the one who acutally thinks it’s HR’s job to “just” plan the office Christmas party, can’t refute the data.