Should Startups Be Allocating Resources To HR?

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As a fledgling startup business the people you hire to get you off the ground can make or break your business dreams. Your finances are often tight and the allocation of budget and resources is an important decision, do you prioritize sales, marketing, PR or should you be allocating them to human resources?

HR has been under fire in the media throughout recent years and has become a bit of a muddled term associated with an ‘old style’ of doing business. Encompassing all of the administrative parts of business from payroll to hiring, from staff retention to company culture, the job description of someone in HR is ever evolving as the priorities of businesses change.  

For startups in particular, who tend to focus heavily on company culture as a key incentive for new hires, an HR representative could be very important. Relying so heavily on company culture can be detrimental if an employee were to come along and not fit neatly into it. If an employee has an issue and is unable to turn to HR to solve it then this is when they could potentially turn to social media with their quarrels and have the ability to ruin a company’s reputation. It is in situations like this that having a dedicated HR representative is beneficial to help manage colleague disputes and ensure that company culture remains a selling point and not a social media scandal.  

Another potential benefit of having a dedicated and experienced HR individual in your small business is their capability to improve your hiring processes and ensure you are taking on the right people without any bias. Conducting effective interviews and hiring the right people early on in the life of a business is critical to success and therefore you could argue that hiring someone experienced in HR and the hiring process should come first before hiring anyone else.

But how small is too small to need someone dedicated to HR? And do you really need to make them your first real hire? If you have the budget to do so an early HR hire will never be detrimental to your business but if you’re very small, need to prioritize resources elsewhere or will be slow to grow then it may be worth considering an alternative approach such as HR outsourcing companies or HR software which will help you to fill in the gaps until you can build a department of your own. 

So the answer to the question as to whether startups and their employees need access to HR seems obvious – yes they do, whether this is done internally or through the use of an external agency or software is simply dependent on the size and budget of the business. Ones things for sure, if you prioritize revenue over people you will soon have neither, so despite what you have read about HR being a thing of the past the ideology behind it is as important as ever and should not be overlooked. 

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