Growing Pains: Three Ways HR Can Solve Your Startup’s Biggest Problems

Weak management, zero culture, high turnover. Discover three ways that improving your HR processes can eliminate your startup’s biggest problems.

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Startups, take note: you can only hack through HR for so long.

While hiring a person here or there and worrying about the rest later may work in your early days, the bigger you grow, the more you’ll start seeing mystery problems crop up. Teams with great people who aren’t getting much done. Turnover so swift that for every person you hire, somebody else is out the door. Siloed workers who aren’t sure what other teams are doing, even though you’re only a team of twenty.
The best way to solve your startup’s biggest people problems? Take a few pages from HR’s playbook.

Problem #1: You can’t find good team members

Bad hires cost more than just money—they dent morale, too. Bad management hires do even more damage, creating broken, unproductive teams. Before pumping out job descriptions, make sure you’re hiring the right people for the job by creating flexible recruiting frameworks around the following four areas.

  1. Hire for your phase of growth: Carrie Simonds, VP of People and Brand at Pocket Gems, argues that it’s important to adjust recruiting to your startup’s size or phase of growth: hire energetic generalists in your early days, build a recruiting team as you grow, target and hire specialists with your now-sophisticated recruitment team, and build a culture of recruiting to keep a full hiring pipeline once you’ve matured. An employee who helps you hustle through your early days isn’t always right for your later-stage startup years later.
  2. Use a scalable recruiting system: Even if you’re still in your early years (or months), implementing an applicant tracking system that links to a careers area on your website is a standard best practice. Internally, gather comments from team interviewers, keep all of them in this single system, and enable referral features. As you grow, your team will be your top generators of quality new hires. Make it easy for them to send along great candidates.
  3. Teach your team recruiting basics: Young startups tend to attract energetic but inexperienced people—employees who may have been interviewed a lot, but lack the chops to sit in the interviewer’s chair themselves. Brief your team on their important role in recruiting top talent.
  4. Create a foundational onboarding program: Enrolling even a couple of employees in benefits the traditional way (and managing details for your existing team) is a full-time job. At most startups without designated HR, this responsibility falls on the shoulders of the founders, senior leadership, or office managers, distracting significantly from their primary responsibilities. Using an HR platform that automates this administrative onboarding, offboarding and maintenance work will help your small team get on with their core work.

Problem #2: Weak management

Products aren’t the only things that can break. When you’re growing a startup, just as you can incur technical debt with patchwork code, the same can happen with hiring and management. Robert Laing, Founder of Gengo, has dubbed this “HR debt.” According to Laing, HR debt reveals itself in many situations, including:

  • Unclear hierarchies and fuzzy reporting structures
  • Lack of performance reviews and feedback
  • Employees with inflated titles, salaries, stock options, or other perks

The ultimate source of HR debt is weak management and poor HR decisions. To remedy it, you must identify where your team isn’t doing well and make adjustments, no matter how painful they may be in the short term. Hire, fire, reorganize.
Because these problems are some of the most challenging to fix, even if you outsource or manage your own benefits and HR admin, such strategic challenges are sometimes best tackled in tandem with an experienced HR expert or consultant. The right HR partner can help you develop competitive teams and navigate choppy compliance issues with creativity and sensitivity, both during HR debt cleanup and long after.
However you’d like to untangle your people problems, just don’t leave them unchecked. HR debt creates destructive, expensive, and hard-to-fix problems like high turnover. Find opportunities to train your team, chat with even your most junior employees regularly about what’s working and what’s not, and make sure you’re seeking out expert guidance from advisors and board members when needed.

Problem #3: Perks, but no culture

Don’t confuse perks and values with company culture. Instead, learn from Ben Chestnut, Founder and CEO of MailChimp and Ben HorowitzAndreessen Horowitz Co-Founder, who have pinpointed why culture matters and how to reinforce yours.
Horowitz says that culture isn’t about “yoga and dogs,” it’s about ensuring that your critical operating values persist (“such as delighting customers or making beautiful products”). Culture also distinguishes your company from competitors and helps you identify potential new hires who fit your mission. He recommends that leaders program “shock value” into everyday work, with things that are “trivial to implement, but [have] far-reaching behavioral consequences.”
For example, Andreessen Horowitz believes that while investors are involved in building a company, entrepreneurs are the truly committed ones in the relationship—“in the bacon and egg breakfast of a startup, we were the chicken and the entrepreneur was the pig.” To reinforce this respect they have for startup founders, they have a $10/minute fine for being late to meetings with entrepreneurs. The fine seems severe to new employees, but it’s easy to implement, and ensures that this critical operating value endures.
MailChimp, known as much for its vibrant and playful brand as its popular email marketing platform, has over time developed and codified a way of fostering a creative culture. Its founder argues that managers should lead when it comes to fostering a creative culture—when working on projects, for example, creative managers shouldn’t just focus on output, but must also work to capture and preserve the little bits of “chaos” that pop up along the way, like off-the-wall ideas that are usually forgotten after a brainstorm. It’s the job of a creative manager to save these bits and pieces, recombine them in productive ways, and translate the result into something that people (users) will find valuable and useful.
In your own startup, remember that company culture should reinforce your operating values and distinguish your company. The best managers know that culture isn’t about happiness, it’s a prerequisite for any truly competitive company.

Where should I start?

Easy-to-manage HR should be at the heart of any fast-moving startup. Discover how to offer benefits, stay compliant, onboard employees and more with Zenefits, all for free. See how it works.

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