Overview: HR Building Blocks for Startups

Prep your organization for hyper-growth and future-proof it in a climate of uncertainty with these simple tips.

After a tumultuous 2020, the acceleration of COVID-19 vaccines this year sparked a fresh surge of optimism. Whether your sector is primed for a V-shaped or U-shaped recovery, this is a good time to set the groundwork for expansion, invest in additional capacity, and create a sound COVID-exit strategy.

The million-dollar question is: How can start-ups and small and medium-sized enterprises (SMEs) pivot to ensure scalability, agility, and resilience during such turbulent times?

One factor worth considering is how quickly successful start-ups tend to transition between different growth stages. In the beginning, hiring and people management may be informal, unstructured, and mainly overseen by the entrepreneur. However, as the organization grows in size and complexity, a well thought-out human resource management strategy will be necessary.

Indeed, fast-paced expansion may expose cracks and reveal organizational blind spots that could level off growth at a later stage. In your hurry to scale, you could end up with disengaged employees, unnecessary tension, a lack of trust, and unwanted attrition.

Many start-ups understandably struggle to find time and resources to invest fully in human resource management. However, do not make the mistake of routinely neglecting it until major issues crop up. Many common problems are easy to troubleshoot with the right systems in place.

Having worked with more than 100 start-ups in the last seven years, we summarised the following versatile building blocks that you may easily adapt to future-proof your expansion plans.

#1 Hiring and On-boarding Large Numbers Quickly

While most companies were struggling to cope with COVID-19 in 2020, New York-based mother and baby skincare brand Evereden grew 500% year over year and launched 15 new products.

“We became more aggressive with our hiring policies during COVID-19 as we were growing, and also saw a good opportunity to connect with very talented individuals in a time of upheaval and uncertainty,”

**- Kimberley Ho, CEO and Co-Founder of Evereden**

Hiring, however, is not a simple grab-and-go process. One needs to understand the company’s vision, strategy, and goals and then translate them into appropriate roles and the right talent. Then comes the pitch to prospective talent, a streamlined recruitment process, and interview guides. It is a lot but unfortunately, your job does not end at talent acquisition!

Any influx of talent introduces new roles and layers of complexity. How your employees are initiated into the organization affects their productivity.

Create a smooth on-boarding process – ensure role clarity for each new hire, as well as the existing staff who may have been affected by role adjustments resulting from the hire, is important. To ensure role clarity, ConnectOne’s Joanna Yeoh suggests the RACI framework, which outlines the key stakeholders of any department or project. The “R” in the acronym refers to those responsible for driving outcomes; “A” are those with authority in the final decision-making process; “C” are those who need to be consulted, and “I” are those who merely need to be informed. This must be done every time there are new additions to the team ( or as frequently as needed especially in a startup) to ensure no double handling.

Milan Reinartz, CEO of Intelligent Video Solutions (iVS), which is a leading video delivery and monetization platform, agrees. “Generally, more than half of the people's issues and misalignment are due to the lack of clarity in communications. So being super clear in expectation setting and alignment of roles are key,” he shares.

Ensure that everyone understands their tasks, deliverables, work processes, as well as the roles of their colleagues. This way, you will not only avoid duplicating roles but also pave the way for better teamwork and more accountability.

You may also introduce staff to the organizational vision, culture, values, policies, and benefits via a short orientation program and a simple employee handbook.

Assigning mentors or “buddies” also facilitates a smoother transition.

#2 Building Culture and Value as You Scale

Take a leaf from the book of one of our millennium’s most successful start-ups – Facebook’s career page makes company culture and storytelling the bedrock of its recruitment process.

This is especially important as your company scales and remote working becomes the new norm. Without frequent face-to-face contact, a strong company identity helps to connect employees with their role and purpose, making them feel more invested in the company.

“When the company was smaller it was easy to get the feel of the values because you saw the founders, who were basically the living values, on the shop floor every day; you got it by “osmosis”. But as we grew we realized we needed to articulate a succinct vision for our organization and crystallize our values. We did a lot of communicating externally but we needed to do internal branding,” says Sherwin Siregar, deputy CEO, Atlas Sound & Vision during an interview with the Chartered Institute of Personnel and Development (CIPD).

This is one of the cornerstones of Evereden’s rapid growth. “We ensure the culture is always at the forefront, conduct cultural code “check-ins” to see how people are feeling and ensure that as the team expands quickly, roles are clear and the cultural tone of the company is maintained and healthy,” shares Kimberley.

#3 Engagement & Communications

As Kimberley succinctly puts it, “Once you have hired your rock stars, you need to spend time managing these relationships.”

Coaching and alignment are critical for scalability and agility.

Milan Reinartz (First from the left), CEO of Intelligent Video Solutions (iVS) and his Leadership team.

“We cannot effectively scale our own time – we can all work 80 hours a week, but most of us will eventually burn out or become very unproductive. So a key part to scaling a company is to coach your direct reports to work independently but in close alignment with their peers,” Milan stresses.

“This involves asking questions such as “Why isn't this working?” or “How can it work better?” and ultimately fostering a mutual understanding of shared objectives and clarity in an environment of trust. I try to build this kind of culture by over-explaining the context of “why” we want to achieve certain objectives but leaving the “how” to the individual, only getting involved where it materially affects profit and loss,” he adds.

Understanding how each member works, how they think and prefer to communicate is a foundation to an engaged and effective team. With the use of Emergenetics, the team at Appiloque understood that the most important thing is “our team is made up of unique individuals, and there is ultimately, strength in diversity,“ says Lisa Tan, Director, Co-Founder.

One of the policies that founder and CEO of Indonesian crowd-funding platform ModalKu, Iwan Kurniawan wishes he had implemented earlier is internal communications to “boost the transparent flow of information and employee engagement, (as well as) a regular cadence to engage all employees, team leaders (and) new employees”.

#4 Optimizing Performance

As a leader, how do you motivate your growing team? This brings us to possibly the most delicate topics in human resources – compensation. Oftentimes, when a company expands, a new team may come with a different salary scale, causing tension within the organisation.

Carefully consider how to benchmark remuneration, and factor in performance appraisals to better manage poor performers, and reward and retain talent. In addition to individual performance indicators, peer reviews and team performance are also important in the evaluation process.

Milan suggests an Objective and Key Results (OKR) style instead of a top-down hierarchical approach. “I believe in hiring leaders who take ownership, act like principals and don’t need to be actively managed, then, giving them a set of lofty goals, and letting them figure out how to achieve them,” he says.

Kimberley believes in strength-based performance management. “While we certainly can understand if our managers tell us where we are weak and what needs to be improved, studies have shown that the human brain responds better towards areas of strength, rather than weakness. We are wired towards becoming better in areas we’re already naturally strong at,” she explains.

When managing her team, Kimberley makes it a point to understand their unique strengths and puts them in roles where they can excel.

For a more flexible reward system, you may also include both fixed rewards such as raises, as well as variable rewards such as stock options, bonuses, recognition, benefits and career development opportunities.

These form elements of your HR Architecture which are fundamental structures and systems of a high-performing organization.

Indeed, one of the greatest advantages of start-ups is their agility and adaptability, which often enables them to punch above their weight and compete with industry titans many times their size.

That said, from the get-go, it is important to think of your people as your greatest assets. Instead of reactionary HR, invest in these HR building blocks that will save you from common pitfalls, and increase your brand value exponentially as you scale.

Check out the rest of our 5-part series as follows

Overview: HR Building Blocks for Series-A Startups

HR Building Block #1: Hiring and On-Boarding Large Numbers Quickly

HR Building Block #2: Building Culture and Value as You Scale

HR Building Block #3: Engagement & Communications

HR Building Block #4: Optimizing Performance