A friend and colleague, who is a trusted GTM advisor for various start-up SaaS companies, recently asked me when the right time is to add HR. Following is part of my reply,
"Usually a start up has “enough” HR to get people paid and usually it’s some flavor of internal or external controller/finance who manages. All good.
But … around 20-ish employees and founders/leaders start experiencing issues related to PTO policy, T&E policy, recruitment/onboarding, performance management expectations, issues around comp parity, every day HR-related Q&A, etc. Lack of process is common. Mandated reporting by state or fed tend to go unaddressed (yikes!).
A practical approach is bringing on a fractional CHRO at this point. But someone who delights in everything from getting super dirty hands in the trenches to creating a robust people ops roadmap that addresses both tactical and strategic needs at least 24 months out.
Once 50+ employees are on board and especially if employees are distributed domestically and/or globally, a whole new cadre of issues emerge: differing state-by-state labor laws (this is a big deal), decisions around using an EOR or establishing an entity in-country (outside of the US). And the employee relations issues including career pathing, comprehensive benefits, green people managers who need guidance, onboarding, off boarding, asset tracking, selecting and implementing an HRIS, are low hanging fruit that the majority of founders find distracting (and more importantly rob them of time for what they do/know best).
This is about the time a seasoned people ops pro is needed to lead and manage from top/bottom and side/side.
These are broad strokes and there are loads of different and legit approaches.
Not all but many start-up leaders tend to wait til there are people ops-related issues keeping them awake at night before taking action. Think dentist: a lot of people only see their dentist when there is pain. lol
The sooner a capable (underscore capable) people ops person is engaged, whether fractional or perm, the sooner founders and their product/GTM teams can focus on what they do best knowing there is a competent HR person weaving together the broad people operations strategies and mandated compliance elements.
This is “pay me now or pay me later” fact. But the longer founders/leaders wait, the more painful and expensive the course correction. It’s loads easier and more cost effective, establishing a scalable people ops center sooner rather than later".
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