We are in an age when raising money as a startup isn’t as much a necessity as a race to the nearest VC to achieve the bragging rights for raising more money than your competitor. As someone who often works with startups that are still in the process of raising money for their enterprises, I am amazed that few of them have thought of having a workforce strategy.
In fairness, startups tend to run leaner, both out of necessity and intention. As a result, they rarely see a reason to have an HR or Talent delegation to the extent seen in most established organizations, for a plethora of valid reasons. When speaking with most founders of startups, you will be hard-pressed to find any that don’t have aspirations to scale their business beyond its humble beginnings. In fact, it is often through the grandeur of their ideas and enthusiasm around scaling that they even become attractive to investors.
The question remains: How do you consider scaling your business without considering how things will be accomplished in a way that is sustainable for the company?
Like many startups, I have worked in every aspect of my business to the tune of many long days and nights. It is what you must do when hiring help is a remote or non-existent possibility.
Nevertheless, there is a point in all our respective businesses when wearing all the hats becomes a pain point and decisions about what needs to be delegated become a central concern. Conversely, it isn’t at all strategic to go to the trouble of raising funds and scaling, only to realize that your operation lacks both vision and practices for properly managing a workforce.
People are the core of any business, whether large or small. High turnover rates in the startup world are a known factor, yet we seldom see remarkable changes in approach at this level.
To help raise awareness of what should be done prior to approaching investors, I have compiled a list of things startups can begin to do:
1.When envisioning how you see the company growing, start to map out how the work will be carried out in specifics. This is often referred to as a “workforce plan”. Write out the titles for job roles and the work needed, complete with the proposed hours of work and/or the time it will take per working week to execute tasks.
2. Once you have this, consult with an HR lawyer or, at a minimum, familiarize yourself with some basic employment law governing what will be required of you when you decide to hire employees for your company. The last thing you need as a young organization is to be faced with fines or lawsuits because you aren’t adhering to specific regulations or laws.
3. As you think about your company’s mission and vision, ensure it also has scalability. That is to say, it must be rooted in behaviors and ideas that are easily communicated and adopted by your future workforce. If you are the only one in your organization who gets the vision and mission, you are setting your enterprise up for failure.
4. VCs are interested in unique investments and making profits on their investments. You should never go blindly into raising funds without considering what it will cost to bring in contractors to keep your startup afloat. More isn’t always necessary or better early on, but having a line of the budget earmarked for workforce purposes makes you look smart.
5. You may not grow to need an entire HR department, but you should have someone with expertise in Talent Management and HR on speed dial or on your team if you can afford it. As a founder, your job is to carry out the vision. A good HR consultant or practitioner will be the glue between your business goals and mobilizing your people legally and, hopefully, happily.
There are myriad reasons why having a solid workforce strategy makes good business sense. The key is to release the mindset that your business strategy and workforce strategy are separate entities. A good business strategy illustrates the importance of the people who power the business. Preparation in all regards is imperative.