Entrepreneurs need to make hundreds of decisions as they begin the journey of building a company, and staffing is one of the most important. Many companies launch with just the entrepreneur on board, but in some cases, a business also launches with a team of employees. Even if the firm has three or four people on staff, it should consider having an HR team in place to ensure compliance with federal, state and local laws and to minimize liability issues.
Business owners may hire an HR team or outsource HR experts to manage their workplace culture, employee benefits and payroll. Outsourcing HR services can provide startups with more benefits if they have limited resources. Your HR department will create policies, plans and processes to hire, train, retain and evaluate employees and keep your company organized while you grow.
Check out this list of HR considerations that you must make before launching to deliver a great employee experience, improve employee productivity and hire top talent.
Determine Employee Compensation and Benefits
Some benefits are optional and some are required by law. Optional benefits include dental, life insurance and retirement (401K) plans. Mandatory benefits vary from state to state but can include workers’ compensation and disability insurance. You can start with the following benefits as you build your HR team’s program:
● Compensation — Ensure that your company's pay structure is competitive and fair based on labor market trends. Your HR team should work with the accounting team to establish an effective employee pay structure, and you should establish a fair process for expense reimbursement.
● Health benefits — Check out the available options, what your competitors do and what you can reasonably afford.
● Leave benefits — Consider the federal and local laws and policies before providing paid leave (sick, vacation or maternity time) to your employees.
● Other benefits — Assess your staff priorities before deciding on other kinds of perks, such as free lunch, dry cleaning, transportation and retirement benefits. Try to improve and evolve these benefits as you grow.
Define Work Culture
While every company is mission-driven, being simultaneously value-driven is preferred by employees. Decide your work culture strategically based on your business needs, such as flexible working hours, remote work options and more. Your HR team can help you build a code of conduct, set boundaries and expectations of behavior, communicate company policies clearly and make sure your employees comply with the processes.
Establishing workplace protection rights will help you ensure that your company culture stays on track as you continue to grow. Define your company’s core values and create a culture of clarity that promotes trust and encourages transparency in the workplace.
Get a Human Resource Information System (HRIS)
The HRIS can help entrepreneurs track employee time, manage payrolls and benefits, automate administrative tasks, keep records and much more. There several relatively inexpensive software options that can keep you organized as your company expands. Evaluate company size, payroll needs, industry and budget to determine what tools would be most advantageous for your business.
If you've got limited resources, focus on the essentials and select an HR software system that helps you streamline your operations and save you from making costly mistakes.
Outline Policies for Compliance, Safety and Health
Certain laws and regulations dictate how and when your employees can work. Non-compliance with these regulations can often create liability issues for you if you don’t have an HR team in place.
Therefore, it's important to establish non-discrimination policies and employee conduct guidelines to ensure a better employee experience and limit your company’s liability.
Your HR plans and policies should be customized to your individual startup’s needs. You should include company policies regarding:
● Ethical behavior — Emphasize the importance of ethical behavior to your employees. This includes policies on equal employment opportunity in the workplace as well as sexual harassment policies.
● Employment at will — Make it clear that the employee and employer can end the employment agreement at any time.
● Policy changes — Reserve your company’s right to change policies whenever necessary.
● Safety plan — Make sure your work environment is safe for employees, meets federal and local regulations, and complies with the Occupational Safety and Health Act.
Creating a workplace in line with federal, state and local laws for safety and health provides legal protection for your company and leads to happier employees. Regulations change often, which is where a dedicated outsourced HR team can help Ensure that you stay on top of changing requirements so your startup can grow smoothly.
Establish Onboarding and Recruiting Procedures
Even if your startup is small, you need to consider how to make hiring decisions. This includes where to post your job ads, how to find your target candidates and how to structure the onboarding process. Your HR team must set up a fair process for hiring, training, promotions, compensation, benefits and performance reviews.
Entrepreneurs should have a basic HR plan and necessary paperwork ready for hiring and onboarding to ensure that the process is non-discriminatory. Establish a system for gathering employee feedback to address staff concerns.
Develop Training Programs, Performance Review Methods
Building a great company starts with hiring and retaining top talent in leadership. When you’re just starting your new business, training employees may not be your top priority. But make sure your employees grow and develop their skills as your company scales. This can be accomplished by tracking employees’ goals and establishing a performance evaluation process. Make sure you are aware of the HR plans and budgets, which will help you create a timeline for implementing each action.
Create and Follow a Handbook
An employee handbook defines your policies, procedures, processes, benefits and more, and outlines the kind of culture you want to create. It confirms that employees and employers are on the same page and aren’t confused about new policies. The handbook will also help you answer many basic employee questions that would otherwise take up valuable HR time. Drafting a handbook in the early stages of your startup sets you up for success and helps you handle workplace disputes and conflicts.