If You Have Humans, You Need Human Resources

humans
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Is it time to talk about the end of/death of/extermination with prejudice of HR again? Oh great! I know, I know, “everyone hates HR” just like “everyone hates lawyers,” so when the mandatory seasonal think pieces on the much-looked-for death of HR come along, we’re supposed to take our knocks and accept it as due.

Some of it is our due. Some HR departments are bloated and unstrategic — it’s true. But some management teams and companies are bloated and unstrategic, too, and I think it’s rare to find a terrible HR department in a company that isn’t otherwise struggling. The work that HR does has so much impact on company culture and success. When HR is neglected, a dusty, out of date department hidden away in the bowels of your head office, so too are the core HR functions neglected.

The same is true of small businesses that “don’t need HR.” It’s become common in the tech industry to hail the death or dearth of HR at startups because “everyone hates recruiters.” But startups have small or no HR departments because they are small businesses, not because they’ve eliminated the need for HR.

When the whole idea of human resources is jettisoned, those core HR functions are likewise absent from the business’ core priorities. And while the need for full time HR employees is dependent on the size of the business, the need for HR work, concepts and processes isn’t. Someone needs to make the human element a priority.

There’s No Eliminating the Human Element

Small businesses often don’t have an HR department or even a lone HR generalist, but that doesn’t mean they don’t “do HR” or handle “HR problems.” All companies, small or large, have human resource challenges — and these can’t be eliminated by building the perfect company culture or team, or having the right package of HR/legal software. Human resources has everything to do with the human side of business, and for that reason it will always be a complex and necessary field of study and work — in one form or another.

Human resources has three functions, some of which, depending on the size of the business, can be handled by founders, managers and team leaders. Not all of them are so easily taken on by other managers. And not one of them should be considered irrelevant, no matter the size of the business. These functions, broadly speaking, are:

  1. Recruiting
  2. Compliance
  3. Development

In startups, recruiting is that all important step after funding: growing the team. For that reason it gets a lot of attention from founders, team leaders and investors. It’s a core business priority. Do startups need an HR department to handle recruitment? Well, no, a lot of them don’t. Many startups have developed a healthy culture of recruiting-as-business, where every employee and manager helps to find and integrate the best possible employees for their team. Others combine that with the services of professional recruiters and sourcers — especially useful for niche hires and international hires, because one’s personal network isn’t often multilingual and worldwide.

Employee development, though, is often thought of as something that only big companies need to worry about. And compliance? Well, we’ve got Zenefits for that. I’ve written before about the downside of relying wholly on software packages and startups for compliance and the importance of employee development is an incredibly common topic here on B4J. But these two HR functions are just as important as recruiting and if ignored, can cause huge legal and cultural problems that will haunt your organization for years to come.

Who Needs HR?

Employees. Managers. The company. Everyone needs HR. But most importantly, vulnerable employees need HR to be a core business priority and they, like the rest of us, need HR to be fair, open-minded, substantive and strategic. How big your HR department is (five employees? one employee? a consultant?) is entirely dependent on the size of your company and the complexity of the workforce (remote or in office? employee or freelance? casual or permanent?) but the need to give substantive thought to all three core HR functions is universal. Recruiting, compliance and development are all part and parcel of company culture, employee and company success, and limiting legal liability. They are different aspects of a single resource/problem that can make or break your organization: people.

At Motherboard, Julianne Tveten says that HR often comes last at startups and this has dire consequences for women. The neglect of HR in tech startups is partly due to the pattern of growth that startups experience and partly due to a cultural disdain for “Big HR” itself. Startups are often founded by small, tight-knit groups, but after funding, are expected to quickly bring on dozens of new workers. At this stage, recruiting is of paramount importance — and to a lesser extent, compliance — but development, of both employees and company culture, is given less attention. “We need to build a cult” is the usual wisdom for startup growth, because cult members don’t mind long hours, low pay and no benefits. Cult members are here for the work, not the money. And cult members “put the product first.” While the cult is working hard on the product, many things are being neglected in the background — and not always by accident. Tveten says that

“Because it can result from a mere lack of consideration, this deficient infrastructure may not seem malicious. However, conscious decisions do contribute to the problem. The ethos of “disrupting” established institutions can color startup founders’ perceptions of traditional business organization; many companies, led by enterprising 20- and 30-somethings, reject the cubicled infrastructure of the offices of their parents’ generations in favor of an ostensibly open, “streamlined” approach. In turn, the securities those older employers maintained—eight-hour days, parental protections, and incremental pay raises, for example—often disintegrate.”

Without an HR department or clearly defined HR duties shared by non-HR managers, and without HR being considered a core business priority, some things fall by the wayside. When treated piecemeal, developing, rewarding and diversifying your workforce is impossible to track or encourage. Similarly, without clear policies for onboarding, offboarding, training and performance evaluations, it’s hard to get a handle on how your employees are faring and even harder to ensure that employment law is being obeyed. Ian Carleton Schaefer of Technology Employment Law told Tveten that “the wakeup call comes by way of litigation, investigation, or when the people strategy is not completely sound and investors or potential acquirers look at the operating model and it impacts their evaluation. And that’s often way too late in the game to be focused on that.”

Two years, five years, ten years later is too late to start thinking about company culture, employee satisfaction and what kind of workplace you want to have. It’s too late to start thinking about diversity, safety or values — because the day-to-day work during those intervening years already put in place a company culture in which those concerns did not and do not figure. The murky human element of “human” “resources” is and must be a core business priority from day one.

You may not need a big HR department but you do need HR.

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Comments

  1. I agree. HR Departments are essential to every company. I can’t imagine working for a company without. They serve so many purposes (especially around compliance).

    Reply
  2. I think one of the challenges for HR is that they have become compliance heavy and as such have also lost some of the focus on more outwardly focussed elements that you mention such as development. Development is really the one HR area that allows HR to increase their visibility with the whole organisation. The results can often be a situation where the ‘average’ employee rarely experiences HR throughout their career. You could look at this 2 ways. In sport, if you don’t notice the referee he is said to have had a good game. Not sure you can apply the same logic to HR though?

    Reply
  3. I couldn’t agree more. As someone who has worked with several startups and young businesses, I have noticed a certain pattern. It goes something like this:
    1) Company is started, and morale is high as the few people involved work enthusiastically toward achieving their dreams and goals.
    2) Growth happens quickly, many new faces are hired (often at bottom dollar) into a cult-like work environment. The workplace is devoid of life signs because everyone has their nose to the grindstone.
    3)The company becomes reasonably established and begins hiring some real talent. By that time, there is no company culture for the talented folks to thrive in, combined with a “monkeys-and-the-ladder” mentality. Now the really strong talent leaves as quickly as it is hired, causing a problem with high turnover that stalls or slows progress to infinity and beyond. They don’t get to the point where their talent can thrive and become an asset.

    Tl;dr – A package of store bought cookies in the break room once a month is not solid HR – especially when there are thirty employees and twelve cookies.

    Brock |
    Reply
  4. An organization cannot build a good squad of working professionals without good Human Resources. Without a proper setup for HRM an organization need to suffer from serious problems while managing their regular HR activities.

    An automated system will enable your HR Departments to provide business insights your offshore offices & help them settle down with ease in foreign working conditions. I think it is indeed a necessity for offices today. We need top of the line HRMS Solutions to enhance productivity. My office tried out this new HRMS Solution Kwantify a few months ago and it seems to work really well. I think you should see it here : http://www.kwantify.com

    Reply

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