Does my start-up need HR?

Dear Caroline,  
I am an entrepreneur managing a relatively profitable start-up. Although we have been running smoothly for the last three years, recently we brought some investors on board because we needed funds to expand our operation. However, these investors have given us several conditions among which is creating a human resource department. I feel there is no need for this since we have been managing well without it. I need to understand why I need  this department  before I create one.  Amanda 

Hello Amanda,
There are a lot of decisions to make when starting a company. And building an HR team should be one of them. Because no matter what industry or stage you are in, every company faces the same problems when running a business. 

If your business depends on keeping good people and keeping them productive and happy, you need someone whose job it is to do that.
 
And by an HR person, I mean someone who is the advocate for the employees. 
While most HR tasks may sound trivial to start-ups, it is important to establish clear HR solutions for your business right at the very beginning.
 
The role HR covers in start-ups are the same in larger organisations, just lesser in volume. No matter how awesome your products and services, if you don’t comply with local laws and regulations your chances of succeeding is slim. Compliance issues change over time, and as a founder, you don’t have the time or expertise to deal with these. 

HR helps start-ups avoid costly lawsuits and big fines. It helps your business stay on top of regulations and out of hot legal waters. 

When companies reach at least 30 employees, figuring out how to develop those employees becomes critical to retaining them. 
HR is the best arm of your company for developing career-pathing programmes to prevent turnover, which is expensive and disheartening for employee morale.

As the founder or manager, you already have a lot on your plate. And the last problems you want to entertain are employees coming to you with all sorts of questions about benefits, pay, time-offs, and other issues. And you are not even the right person to address their concerns, anyway. 

These HR issues require a specific point person or team. When employees know they have someone to turn to when they have problems with their pay, benefits, or schedule, they are more likely to be more productive and content.

 Having a dedicated HR team or employee handling the backend of your business will save you time and resources so you and your employees can focus on developing products, providing customer support, and growing the business. 

It is said that the human resource department is  a reflection of a company’s leadership. As long as the team you get learns your values, you will be able to structure an HR department that you can work with comfortably.

Caroline Mboijana,
Managing Director, The Leadership Team (U)  [email protected]