How to Know It’s Time to Add an HR Department

When
starting their businesses, most entrepreneurs tend to wear many hats. However,
there are times when they need to step back and look at how they may be
unintentionally hurting their business and employees.

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Consider the
experience of Mollie Delp, the designated HR specialist at Workshop
Digital, in Richmond, Va. At the digital marketing company, Delp juggled
multiple duties while also helping co-workers manage human resource tasks.

“While
growing and developing our operational service teams, we also took care of
developing HR processes, like hiring, recordkeeping and benefits
administration,” Delp told me via email. “We only had slightly over
20 employees, but things already felt messy and inefficient. Important
things were bound to slip through the cracks.”

If Delp
hadn’t taken charge of HR tasks, the company’s leaders would have suffered from
the lack of time and attention they weren’t able to give other important
projects. That’s why it’s crucial for entrepreneurs to take an unbiased look at
their own processes. At what point do you need help?

Here are
four indications that it’s time fto add a designated human resources
department:

1. Apps can do only so much.

The number
of HR tech tools on the market is growing every day. While these tools are
helpful in running a business, even their founders admit they don’t replace
people, if you go by the words of Steffen Maier, co-founder of Impraise.

Impraise is a
New York-based performance-management and coaching platform,
whose co-founder, Maier, says he recognizes human resources (staffed with
people, not just tools) as a necessity, rather than a simply
nice-to-have department.

“With the
rise of HR tech tools that can help with everything from recruitment to
payroll, many have tried to simply replace the department altogether with apps.
This is actually the wrong move,” Maier explained in an email. “Instead, these
tools are facilitating the transition of HR from an admin role to a more
strategic role within the organization.”

Hiring his
own human resources team early, Maier continued, allowed him and other Impraise
founders to focus on hiring the right people for their team, thus creating a
better employee experience and maintaining a positive company culture.

You might
want the same for your own company: Take a look at the HR apps you’re already
using to assist the business. Gather feedback from employees or use
analytics to determine what’s still lacking in your employee experience and
workplace culture.

Use this
information to decide what employee and company aspects might be improved with
the addition of an HR department. As Maier said, some functions, such as hiring
the right people and creating a positive employee experience and culture, can’t
be done with technology alone.

2. Employees aren’t proactive.

In the
beginning, startups typically don’t have one employee covering human resource
duties full-time. Instead, when a problem arises, people react by stepping into
the role. Many times, however, this leaves holes in the system.

“The
challenge with waiting until that point is, the HR activities that have been
done up until then have been reactive in nature and not proactive,” Jana
Tulloch said by email. She’s a human resources professional at Develop
Intelligence, a technical learning solutions company headquartered in
Boulder, Colo.

The problem
with being reactive, Tulloch explained, is that, “This is where companies can
get into trouble, when required policies, employee records or other compliance
issues have gaps.”

While many
company leaders view HR as only a transactional function, Tulloch said she
believes it’s a strategic one.   

“HR supports
an organization’s goals by ensuring the right policies and programs are in
place to attract, retain, engage and motivate staff, creating a high-performing
organization,” the HR professional said.

The message,
then, is that business leaders need to decide if current HR practices are
reactive or proactive. Start by assessing the most recent HR incidents,
transitions or policy changes: Were they built around compensation,
benefits, performance management and employee relations? Or were they created
in reaction to events that interrupted normal company procedures?

If
entrepreneurs continue waiting for HR issues to arise before addressing them,
their current HR situations will not help ROI or assist in building a
sustainable organization.

3. Someone without HR experience
shouldn’t handle HR.

Human
resource professionals carry a lot of weight and skill. For that reason, having
employees fill in when they can, with no knowledge of HR functions, can be
detrimental.

Lovely Kaur,
founder and executive director of human resources and business operations
at ShieldX, a cloud security vendor in San Jose, Calif., has witnessed
this scenario many times.

“I helped a
startup where the CEO was doing HR without having any HR experience. He was
trying to keep the budget low, but overlooked the potential costs and legal
ramifications of HR done bad,” Kaur told me. “Making a smooth runway before
taking off is so important, and HR is a crucial component of that runway.”

So, whether
a company has five or 500 employees, managing the compliance and legal aspects
of the job cannot be overlooked. If the person running between multiple jobs
has no history or knowledge of HR practices, it’s time to end the balancing
act.

Hire someone
with the ability to mitigate risks for employees and ensure the
company doesn’t run into any problems.

4. The cost of having no one doing
HR is expensive.

When cutting
HR-related costs, company leaders can face expensive legal risks.

“Hiring,
firing, promoting, demoting and even paying employees can have significant
consequences under the law. So, the more employees you have, the more decisions
you have to make, and the greater the risk of a problem,” Jaime Lizotte, HR
solutions manager at ComplyRight, a compliance resources and solutions
company in Pompano, Fla., explained to me.

Thankfully,
there are outside contractors you can hire to customize your own
organization’s HR solutions. 

If you’re
going in this direction, look for an HR company that provides real
people 
– like Jumpstart HR (rather than an HR platform
that’s all tech bells and whistles). With this type of “people”
service, your startup can customize its HR solutions to fit its needs and
have HR professionals watching your back, offering creative problem-solving
techniques.

Of
course, some entrepreneurs may feel more comfortable with an in-house team
member. If that’s the case for you, start by looking to mentors and other
business leaders to discuss what qualities their HR pros possess that you need,
as well.

Here at Converge HR
Solutions, we specialize in handling all your Human Resource needs through our
outsourcing and consulting models. Converge acts as your virtual HR department
handling, regulatory compliance, onboarding, job descriptions, vendor management, employee
training, performance management, employee relations, compliance audits, and
more. For more information, visit our website at https://convergehrsolutions.com/ or email us directly
at info@convergehrsolutions.com or give us a call at
610-296-8550.

Article Source: https://www.entrepreneur.com/article/296696

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