I was interested to read Nosa Omoigui’s article in HR magazine early in July. The article was titled “HR hires should be priority for start-ups.”
In a world where companies are scrambling to find differentiators that make their business stand out from the rest, it’s a refreshing angle on how a well-run and functioning HR solutions can make a key difference. On the same day I was on a training call focused on an Employee Benefits proposition. We talked on the call about what our differentiators were as a business and just as importantly, what customers were asking for.
I asked what the typical number of employees a company needed to have to make flexible benefits work effectively. I was not surprised by the answer. What I was surprised by was that there were many businesses who wanted the service despite their headcount being below the magic number. Why? To differentiate.
In Omoigui’s article, she gives an example of how one company had 2 people working in HR, out of 26 people in total within the company. The company stated,
“Thank god we had someone in that department so that employees have someone to talk to if there are any issues.”
On the surface that’s great and really shows the value HR can add. On the flip side, it rings alarm bells about management capability. There is a sweet spot though, and that comes when HR support is so good that they are almost invisible, while the managers thrive leading their teams. For a lot of start up companies, making 2 of your first 26 hires HR people, would be very unusual….. even in a HR business. So what else can they do?
There are definitely alternative solutions – and one of our best-selling products at Connor is the call of hours’ product. Where companies buy an agreed amount of hours that they can call off at any time. They get dedicated HR expertise, no single point of failure, access to 30 years of IP, and a range of tools, expertise and thought leadership and they can scale it as they see fit.
Of the businesses I have been fortunate enough to work for, I remember a green field role I performed, where I arrived as employee number 25. It was a great opportunity at a great business. Despite it being great, job one was unpicking all of the things that already didn’t work. Designing new contracts, policies, procedures, car providers etc.
It took a while, but the business went from strength to strength. I was able to make considerable savings for the business, from their initial attempts at setting up ‘HR’ without HR, and put in place a raft of beneficial changes that made the company highly attractive. I wonder how much more money I could have saved them and how much difference I could have made to the employee value proposition if I was, say, employee number 5.
The crux is that Omoigui’s article points at the right problem, but may be too singular in its solution. For a growing business that is effectively a start-up, having no HR is something I would objectively argue is a problem stored up for the future. Putting in place a solution from day one, even if it’s not a direct hire, could make all the difference.
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