Your business model has been thoroughly thought out. Developmental stages and release schedules have been laid out. On the other hand, have you given your workforce planning the same amount of thought?
In a small team, people matter even more because they are the heart and soul of any business. You need to employ top people and provide an environment at work that brings out the best in each worker if you want to realize your goal.
Managing human resources and the hiring process are topics that company entrepreneurs far too frequently ignore. But if you want to transform a game-changing idea into a scalable, repeatable commercial success, you must plan for your staff.
The most effective human resources approach for new businesses
HR procedures should be considered from the beginning. Planning for remuneration, predicting the development of your staff, and establishing the groundwork for a flourishing, successful workplace culture are all important components of a sound HR plan.
Your HR policies specifically specify and assist with the following:
Your plan for keeping employees around
A structure for organizations
The hiring and recruitment process
Responses to employee surveys
Training of employees
Compliance by employers
Benefits for employees
You should have at least one person in charge of HR in a company, even though you don’t need a complete department. Instead of giving HR responsibilities to another function, it is advantageous to hire someone with HR experience.
Startup entrepreneurs shouldn’t skimp on their people management, according to Erin Campbell, VP of HR at the hiring firm Altis Recruitment. “An HR adviser can assist attract the right people, manage the interview process, and negotiate offers with an eye to long-term retention,” says the statement.
If you don’t have the funding to hire a full-time HR manager, you might want to think about hiring a consultant to assist you with developing a fundamental hiring strategy and ensuring that you are in compliance with federal employer laws.
6 Best HR Practices for New Businesses
- Gather required documentation and legal compliance
You should consider adherence to federal employment rules as soon as you begin hiring staff. Employer compliance is the basic minimum step of your HR strategy.
You should familiarize yourself with the following federal laws in particular:
Good Labor Practices Act
Act on Affordable Care
Equal Opportunity in Employment
To find out if there are local and regional requirements that you must adhere to, it is crucial to consult the website of your state’s Department of Labor.
For anyone you recruit, you should keep numerous important records on file, including your hiring contract and evidence of their right to work in the US. Additionally, you might want your staff members to sign ownership of work and non-disclosure agreements (NDAs).
Employees can’t take sensitive information about your product or business strategy with them if they switch jobs thanks to an NDA. The intellectual property (IP) that employees create while working for you is guaranteed to be yours by an ownership of work agreement, however.
Without these records, it may be more difficult to obtain funding, which is especially helpful for company founders. If the business doesn’t own the IP, it will be challenging to attract investors, according to Steven Fried, an attorney and founder of the legal compliance app OlyverApp.
The last set of crucial records is what the IRS needs to process payroll and withhold taxes.
- Create payroll
You need a mechanism to pay your crew once you’ve hired them. Either manually processing payrolls or automating them using software are options.
Payroll software may significantly cut down on the time you spend processing paychecks, so it’s a smart idea to invest in it as soon as possible. Additionally, a digital audit trail is immediately created.
Advice from the experts: Selecting payroll software with HR management tools maintains all of your employees’ data in one location and enables more fluid workforce scalability. Software vendors that offer onboarding tools or enable time off requests are a couple of examples.
Later on, we’ll talk about the best HR solutions for new businesses.
- Create an HR department.
In the end, determining when to establish a specialized HR staff depends on variables like your financial resources and development rate.
If you’re just starting out, your HR team can be made up of one person as long as they have the appropriate knowledge and aren’t simultaneously filling another position.
“The sweet spot for bringing an HR specialist onboard is when you’ve grown to roughly 20-30 people,” advises Kate Kandefer, co-founder of SEO platform SEOwind. If you intend to scale quickly, though, earlier may be ideal.
- Project workforce needs
A recruiting projection or team road map that is in line with your business’s fundraising strategies and strategic objectives is beneficial as your operation grows. Ideally, you should be able to revisit and modify your three-month and six-month estimates.
Your prediction should, at the very least, outline which positions you want to fill when and what their starting salaries will be.
You may minimize critical employment gaps by having a clear hiring plan in place. You can also determine how much of your sales or raised cash will need to go into hiring and compensation.
Expert advice: A proactive method to make sure you stay a competitive employer is to develop a benefits road map together with personnel estimates.
- Create a guide for hiring
By clearly defining your hiring procedure, you can improve the candidate experience, train additional recruiters as your company expands, and make talent acquisition predictable and scalable.
It’s not necessary to over-engineer your recruitment manual. It may develop together with you over time. Start with a simple version that includes rules regarding:
Posting open positions: where to do it, sample job descriptions, sample applications, and boilerplate language to describe the employer, culture, and benefits
Recruitment duties and responsibilities: Who reviews applications, contacts applicants, and has final authority over hiring decisions?
Interview protocol includes the duration and format of the interview, whether technical tests should be administered, who should interview potential new hires (such as human resources, managers, or peers), and a list of questions you ask each applicant to determine compatibility with your workplace culture.
- Resources and employee onboarding
According to a survey by Silk Road Technology, 27% of new employees gave their onboarding experience a 5 or lower on a scale of 1 to 10, and 9% of workers even quit a company as a result.
The fact that you might not have the resources of a big company is no justification for your onboarding procedure, which plunges new workers into the water and hopes they learn to swim. When done well, onboarding can increase employee retention, performance, and engagement.
A successful onboarding strategy should:
- An office tour will assist new hires in settling in to the workplace (or host virtual meetups for remote employees). Give them access to the resources they require, including software, knowledge bases, and spreadsheets (like Photoshop)
- Make them feel like a member of the group by hosting a work lunch or other gathering.
- With the manager’s assistance, establish clear guidelines for the first 90 days of employment.
Additionally, you should create a manual for employees that outlines the mission and tenets of your business.
The handbook should also inform new personnel about benefits, list unacceptable conduct, and explain to staff how to offer feedback, raise questions, or voice concerns.