HR Policy Challenges in Startups: What Are the Top 5 Aspects to Consider?

Key Aspects for HR Policy Formulation in Startups

What are the five major aspects to be considered by HR while formulating HR policies and procedures in a startup organization?

Regards

The startup may vary in terms of operations and sector. However, here are a few generic ones considered by HR in a startup:

- **Optimize:** You will always have fewer resources, delivering more and highly specialized activities. Hence, optimizing remains the word.
- **Schedule:** A startup is close-knit. Any deviation will create major disruption.
- **Dependencies:** Each task shouldn't have just one person delivering it. A standby support needs to be in-built. In case one member leaves or can't deliver, the other should take up the responsibility thereafter.
- **Transparency:** Information sharing and taking team members in confidence is quintessential. Unlike large firms, startups have far fewer options to brush the details under the carpet. Creating a culture of openness helps in dealing with challenges when they arise.
- **Village:** This is a term that I came across recently, ideally used to build an organizational culture. You can find more here: https://www.citehr.com/457102-villag...ngagement.html

Wish you all the best!

In addition to what (Cite Contribution) has shared, I would suggest the following:

Motivating Staff in a Startup

Since it is a start-up, it is essential to keep your staff motivated. A start-up has its own set of difficulties to face, which involves:

1. **No Recognition in the Market:** When you try to sell your service in the market, people do not know you. They are hence skeptical about investing with you.

2. **Low Funds:** Since there are fewer sales, the money flowing in would be low. Your staff may be at a lower salary than the market, and salaries might be disbursed late. This should not demotivate the staff. To avoid this, hold monthly meetings to bring information to all your staff about the company's progress report. Share not just the good but also the bad and ugly.

3. **Work-life Balance:** As mentioned, you might have to walk the extra mile in the initial few years to achieve a brand in the market. Your staff may have to stay back a little or work on a few weekends or holidays. Keep them motivated and engaged so that this does not frustrate them.

Whenever you are in a start-up, having engaged and motivated employees is important. Do not make them feel inferior or as if they are not important. Make them equal partners in the profit you earn. If not by giving plenty of it away, at least something as a bonus and at least mentioning the progress report.

Remember the movie "Rocket Singh: Salesman of the Year." One of the best inspirations I have had (though I fail to understand why the movie was a flop).

All the best. 

The above discussion is for a startup. However, can someone share how to develop a framework for a 50-year-old organization?

Thank you for your reply. That was informative. Can I know what the top 3 functions of the HR department that are outsourced in a startup organization are, and also the major reasons why employees leave a startup organization?

Thank you.

Why employees leave a start-up organization is partly covered in my previous comment, which I would like to emphasize by adding to the list:

1. Long hours of work
2. No brand name in the market, and hence employees don't feel proud to work in a start-up company
3. Work-life imbalance
4. Due to low fund inflow, salary delays
5. Salary paid may be lower than the industry average
6. No scope for growth
7. Frustration is more than engagement
8. If the boss starts micromanaging, the person would be more frustrated
9. Deadlines and targets to hit
10. Benefits offered would be lower

Three HR Functions That Can Be Outsourced for a Start-up

It would depend on the person working in the HR department, the number of HR staff, employee strength, motivational level of employees, etc. Nonetheless, in general, I can say the following activities can be outsourced:

1. Performance Appraisal: Initiating a performance appraisal process and keeping employees motivated can be challenging. Seeking guidance from a professional appraiser in the initial years can help develop a process.
2. Recruitment: For a startup, sourcing the right candidate with the right qualifications and salary fit is difficult. Hiring an external consultant or recruiter to source candidates can save time.
3. Employee Engagement: It is essential for startups to keep employees engaged so they work efficiently, align with the company's interests, and advocate for the company's brand image.

I hope this helps you with your query.

Ankita and (Cite Contribution) provided you with excellent inputs. I have nothing much to contribute except saying that since yours is a start-up, you need to have a clear understanding of organizational goals because your HR policies need to be aligned with these goals. Failing which, they may end up serving a cross-purpose only. Therefore, should the need arise, have a discussion with your senior management about organizational goals.

Secondly, Ankita, while showering all praise on Rocket Singh - the salesman of the year, raised a very pertinent question as to why such a good movie flopped. I too do not know why it flopped. But it is necessary to know the answers to such key questions. You might have noticed that some of the best products in the market failed to take off, while some products, hitherto popular, might have suddenly disappeared from the market. The reasons may be many, like competition or pricing, etc., but one common factor that is noticeable in such flop shows is that either they failed to connect with the people or, even if they established an initial connection with people, they failed to sustain it by keeping pace with the changing needs of the people and thus went into oblivion. Therefore, your HR policies, in order to be successful, need to connect to employees, apart from being aligned with goals. This is the delicate balance which you need to strike in your HR policies to make them meaningful.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai

Hi Namobita and Ankita, actually, my organization has HR policies and practices in place. What is missing is a framework for talent engagement. I would appreciate your guidance on how to go about developing one.

Thanks,
Harini M

Do you mean employee engagement? If so, there are different aspects to engaging your workforce. Try to understand what motivates your employees. The most important thing is to recognize exceptional actions instantly. It is a significant morale booster. I do not mean to say that you should be handing out cash or gift vouchers every time, but at least congratulate them or give them a pat on the back in front of their peers and colleagues. Small actions are crucial in determining how well you can engage your staff.

In addition, you can gain more information by visiting the following discussion threads:
https://www.citehr.com/455372-techni...n-workers.html
https://www.citehr.com/449315-employ...ip-skills.html

As it is in the initial stages, HR professionals must be very cautious in formulating HR policies. Why? Because all policies should align with the following principles:

1. They should be reciprocal between management and staff.
2. Ethics should be followed with a mix of legal formulas.
3. Employees should be motivated.
4. Cost comparison must be followed (Initial Cost and Capital Investment).
5. Ensure longer existence (Minimize fluctuations in between).

Please ensure proper paragraph formatting.

Fit with the organization's financial structure and their needs as per the top management. Compare the industry benchmarks for the current situation. Ensure legal compliance and employee-friendliness. Ease of setting up objectives, achieving targets, and being result-oriented. Effectively communicate and be understandable.

Regards,
Sajid