A simple guide for an HR organisation in start-ups/scale-ups

I often get the same question: how many HR people should you have in an organisation?

Don’t expect this article to give you all the answers you’re looking for, but at least some tips I learned from my 10+ years experience at scaling HR organisations in startups & scaleups.

It’s never too early.

So, how many HR people should you have in an organisation? There’s actually a wrong answer to the question above: it’s none. I’ve read that Google’s third employee was HR, but it seems anecdotal. A lot of companies wait quite a long time to get their first HR role, and the excuse is often:

  • the HR duties are distributed amongst the managers & the leadership,
  • I have more urgent roles to hire before this one,
  • this role will bring us more problems than solutions…

It’s actually true that until you get your first (efficient) HR person, you don’t see the added value that a role like that can bring to the company. But it actually does bring tremendous value. The more you wait and the more wrong turns you’re gonna take, not because you’re not capable, but because it takes experience, knowledge and ownership to manage the project right. Like your Finance person managing all finance matters, you need an HR specialist managing HR projects. And the more you wait, the more issues you’ll need to correct: legally but also on your HR processes, company culture and hiring new talents.

Trust me, it’s always easier to start from a blank page than to correct mistakes.

It’s the same thing as having a project without ownership: everyone is annoyed about the fact that nothing is happening, but no one wants to take responsibility or resolve the issues, having their own projects to handle.

And when the first HR role pops in, I never heard anyone say they would go back to having no one: it’s often the contrary — you don’t know how you’ve done without it.

This is the same principle when you open new entities/offices. You also have to think about the local support you need.. The need may not be from Employee number 1, but same as your first HR hire, once you get them you don’t know how you were doing without them. Employees love to have a close relationship with their HR partner, and most of the countries have specific legal & compliance needs. My advice is to hire an HRBP-like profile as soon as you get to 30–50 employees in a country within the year. It can also be before reaching this number if you have small offices disseminated on a continent (e.g. 2–3 small offices across Asia). Having different countries (and therefore different laws) increases the complexity of HR management.

Regarding the profile, on top of all ‘basic’ requirements of an HR generalist role, you need to make sure that the person you hire will overcome the challenges of being a remote entity and over-communicate to the ‘central’ team. There’s a fine line between taking care of local specificities & needs and ensuring that there’s consistency in the global HR philosophy. You don’t want each of your subsidiaries to have their own company culture & processes. Yes, they need local specific support, but an employee that moves from one office to the other should get the same attention and follow the same guidelines.

Starts with basics.

This pic from Laszlo’s book “Work rules” resumes it well:

Before trying to reach the paradise where HR professionals are adored and everyone is just incredibly happy to come to work every morning, start with basics: HR that just works.

What does it mean?

  • Your payroll system is working: people are paid on time, without any errors.
  • You’re fulfilling all legal requirements: your working contracts are in place, you have implemented the policies that are compliant with your company size and location of your offices, you respect all health & security protection for your employees.
  • You have a basic employee & manager service:
  • employees know what their main responsibilities are, how they are assessed and rewarded;
  • managers have access to their team’s basic needs (holiday management, compensation history, etc.) and know how to manage performance of their direct reports.
  • You have a generic recruiting process that allows you to hire talents that fits your organization & culture.

Until you have that, don’t get distracted by the awesome new referral tool or the incredible coaching offers you receive, you need to get your basics right before pumping your ride.

Don’t get trapped by the 5-legged sheep

The first HR hire is always the hardest, because the list of duties is just getting longer and longer once you start thinking about it: recruiting, onboarding, legal, payroll, etc.

My advice here: don’t get trapped by the 5-legged sheep. Trying to find someone who’s good at everything is actually preparing you to fail at having the right person.

And because there’s an infinite amount of work, most of the time it’s about prioritizing rather than having a one-size-fits-all profile.

And as soon as you list all the things you need to do, you’re often going to see that you don’t need one but 2 or 3 different HR roles to support your growth.

The best way to know what kind of profiles you are looking for is actually to sort out your needs.

Talent Acquisition: your ambassadors

Let’s focus first on Talent Acquisition (TA):

  • how many people do you need to hire this year (and the next to come)?
  • What kind of profiles? Tech vs non-tech / seniority level / international

From experience, a recruiter handles on average 40 positions per year for generalist roles (e.g.non-tech) vs 20–25 positions for tech roles. This ratio slightly changes depending on the seniority of the profiles you’re looking to hire, and the expertise the current team has regarding recruiting (is your process structured? Are your interviewers trained on doing interviews?). The more seasoned your current hiring managers are, the easier it is to send candidates through the process. It also implies tooling: do you already have an ATS (Applicant Tracking System) in place? Tooling is key: I estimate it costs you half of the time of a recruiter spending on tracking, scheduling, reporting… if you don’t have the right tools in place.

If you feel you’re a bit stretch at hiring a full-time employee with your current needs, there’s additional missions you can add to the role:

  • Tooling & structuring: We already talked about tooling. Implementing an ATS is a big project and a time-consuming one at first. It’s also never ending as you always want to challenge the way you do things, and add more and more functionalities along the way. It goes the same with structuring: what kind of interview you want to do, who will be the interviewers and how to train them to be efficient… the more structure upstream, the easier it gets to find the right talents.
  • Campus Management: if you’re hiring interns or consider it, it’s nice to have someone in charge, who’s going to relay your offers in the schools you’re aiming for, create strategic partnerships and generate a specific pipeline and process.
  • Employer branding: it’s not only about finding the right candidates, Talent Acquisition is also about advertising how awesome your organisation is internally. Employer branding is reaching out to passive candidates that are looking for a specific culture — you really want to work on that if you want to scale properly.
  • Onboarding: after the offer is accepted, you want the candidate to have an awesome onboarding experience, and start the honeymoon period since day one. I usually put onboarding on the People Development side, but it can be on the TA side as well, it really depends on how much time your recruiter(s) have on their hand.

Regarding the profile, the best recruiters I know are sales persons. They are really good at picking awesome candidates and getting them excited by the company and the role. And as sales, they’re driven a lot by money — which is not a bad thing, au contraire — but you need a very efficient bonus system, that both motivates them to do their best, but also compels them to work as a team. To be honest, the latter is personal… You can have very self-centered recruiters that are amazing at their job, but I rather have a team aiming in the same direction than a very good lone wolf. It works better in the long run, especially when you need to embark new recruiters into the game.

People Partners / HRBPs: your role models

Then looking at the People Development side, you have the (in)famous role of the HR Business Partner.

The HRBP role is a tricky one: if you don’t define upstream what their duties are (and what they are not) then you end up with all-in-one HR generalists doing very low-value tasks. I’m not saying HRBPs shouldn’t have admin duties (we all have admistravia in HR: if you think otherwise you chose the wrong job), but it shouldn’t be the main part of your time. It means that either you have administrative support and/or you have automated most of your low-hanging fruit tasks (will talk about it later).

So, what’s an HRBP? Basically, the HRBP is ready to help any leader, manager and employee during their journey in the company. You want to talk about your career development and defining ‘what’s next’ (training, mobility, promotion, etc.)? As a manager, you want some advice on your team member’s performance or some help to handle a conflict? As a leader, you want to build your future optimized organization as you will be doubling the size of your business unit next year? Call your HRBP.

For me the principal objective of an HRBP is to be the number 1 advisor of every leader (and/or manager) of the scope they’re dedicated to. It means that HRBPs should know the organization they support better than the leaders themselves, that they know where the best performers are and who are the people that are struggling, where the conflicts are emerging and why, and their knowledge shouldn’t stop at people matters only. The most efficient HRBPs are part of the business strategy and involved in the OKRs and annual roadmaps to understand what’s required for the future to come. They should be curious about the market trends of their scope to influence the structure internally.

As you can see, this description aims for very seasoned professionals, and that’s my point. Yes, you can have junior HRBPs, but most of the time you need people with strong leadership and coaching skills that mostly come from experience. You also need solution-oriented minds: employees & managers always come with problems, the job of an HRBP is actually to solve issues all day long. HRBPs are great listeners, with a pragmatic while creative view of things. And they don’t complain (or not often): they like nothing more than chaotic people issues and are eager to make things better.

But don’t get me wrong, as an HRBP you spend your day answering questions and repeating yourself. You’re not a strategist in your ivory tower thinking of the future of Work (with a big W) — you’re a doer, and most of the time you feel overwhelmed by the amount of work you still have to accomplish. But you’re perseverant, and if you admit it you feel very attached to the (annoying, yet touching) people you’re interacting with on a daily basis.

And that’s also why I call them ‘role models’: as being partners to the most critical leaders of the organization, they have a great responsibility of incarnating best practices & behaviors. They are the star employees that should represent best your values and that are highly respected for their expertise and dedication.

In terms of data, my experience tells me that a good ratio is an HRBP for a 100+ employees. But it also really depends on the amount of support the HRBP gets from the other part of the HR organization: recruiting, payroll, administration (contracts, amendments, compensation, disputes, etc.) The more focus the HRBP can be on their duties, the more people they can support.

People Expertise: your rock stars

HR is not only a ‘people’ science, it’s a science that requires expertise. The expertise you need can be either solved with great partnerships (payroll supplier, freelance & RPOs recruiters, professional coaches, etc.) but as you grow, you may find a need for internal experts that can support your ambassadors (recruiters) and your HRBPs on their daily routine.

The most common expertise I had often needed (or seen) internally are:

  • Legal & Compliance: especially if you’re a french company (or subsidiary), you know how complex and time-consuming legal law subjects can take. From having all your legal templates to managing your employees’ representatives, putting in place the needed policies or only respecting the health and security rules… all of that could be under a specific role in your organisation. You also have regular disputes that require a Legal law expert, even if they’re handled by the HRBPs. And finally, as the evolution of work goes, the more peculiar you have to be in terms of remote working, or handling a worldwide pandemic, workforce wise.
  • Compensation & Benefits: in my opinion, this role should be a basic in every organisation. It is just the most important thing for every single employee: how to get paid. Yes of course, we aim at great responsibilities, challenging missions and a fulfilling career… But money (e.g. your salary) is still the fuel of everyone’s life. Organizing the way you deal with compensation, benefits, equity, bonuses and all financial incentives and rewards should be a priority for every company that is relying on their talent to succeed, and therefore every HR organisation.

Personally, partnering with a great C&B expert has been a life-changing event in my career. In a world where data drives our daily consumer life, HR shouldn’t be the last part of the business not focusing on it. Data-driven analysis & reporting are a must to take rational decisions, especially in HR.

  • Learning & Development: As Henry Ford said it best “The only thing worse than training your employees and having them leave is not training them and having them stay.“ Our generation and the next are not like the last ones: we don’t stay long at one company, and the subordinate link between the company and the employee is more and more fainting. People are eager to follow their dream (job), wanting to learn something new everyday, and get new exciting challenges along the way. Also, we don’t want to learn about the 30-ish books of 70’s management philosophy but get actionable and interactive training. It’s time for ‘pick & choose’ and mass customization, and the more specific and personalized learning tools employees want, the more effort you need to put in HR-wise. Having someone responsible for this critical part of the business (yes it is, because you need highly-trained professionals to achieve your ambitious business goals) is mandatory at some point.
  • Other expertises: apart from those 3 no-brainers expertises above, you find a lot more depending on the size of the company and also the type of business or employees you have. For example, the more ‘digital’ your company is, the more effort you’re going to put into tooling & automation. Therefore, having someone specialized in HRIS could become very useful. You also have onboarding specialists that could optimize your onboarding experience if you hire a lot of people. And when you grow internationally, you encounter various cases of relocation and international mobility that could trigger a specific hire on this matter. Also, someone fully dedicated to Diversity & Inclusion will make a huge difference.

What I’m saying basically is that everytime you have someone focusing on a specific vertical, the deeper and more optimized you get on that. It doesn’t mean you need it right now, especially if you’re at the beginning of your journey. Also, think about external partnerships or freelancers if you’re not sure about the long-term need, it’s a good way to start.

Scale before you fail

One thing I’ve been learning over and over again… and keep forgetting… and again re-discovering: you are always too late when you grow your team. When you think about adding a new member, the team is already under water. So plan early: design your organisation not with the people currently in place, but with the additional hires of the year to come. You’re going to see you don’t need 1 but 3 HRBPs, and that you can not manage 100 compensation increases per quarter with only one person in charge, or that you need a tool to automate the onboarding of the 50+ newcomers that will arrive in the next few months.

The time you find the right candidate + the notice period they may have + the ramp-up time you need to have this person fully up to speed, you should already have started the job search 3 months ago, right? And when the person arrives, then you need someone else… again (or something else). So anticipate, and plan early.

It’s all about team dynamics

When I’m interviewing HR candidates, most of the time they ask me: who are you looking for for this role? It’s a good question, and I do take the time to answer it, but it’s not enough. When you’re scaling as fast as the startup you’re in, the team dynamics is as much important as the company culture. It’s like adding a new kid to the family: this is creating a new family and everyone’s role is different.

Therefore, you need to make sure that:

  1. Everyone understands the common goal, and is putting this goal above their own personal agenda. It means at some point that their scope may seem reduced, because it’s shared with someone else, but it’s actually not because the size of scope is increasing on its own. The scope is not reducing, it’s actually getting more complex, with deeper verticals, and more people in a mix — so sure, you’re not in charge of the whole Sales Department anymore, but get excited by the strategic accounts you get to make grow. It’s very important to let go of the past and accept the change. Especially when the change is happening twice a year at least. Don’t hesitate to read this wonderful article that explains better what I’m trying to say.

2. Always try to hire better than yourself. And embrace it. It’s a normal feeling to fear losing your place because someone else seems better than you, but trust my experience, this is how you get better, and how you become the best yourself. Your colleague’s success is actually shining on everyone in the team. And you may learn a thing or two along the way, that increases the global expertise of the team. CQFD: the more superstars you have, the best your team becomes. There’s only positive outcomes to getting more incredible talents.

3. No one should be irreplaceable. It actually happened to me a few weeks ago: someone in my team was sick, and there was no one else that could handle the issue I was facing. I had to wait for the person to come back to resolve it. This doesn’t mean that you have an irreplaceable talent in your team, it means there’s something wrong with the process in place. Everytime I’m spotting that kind of issue, I’m asking the person to document the process and to have a backup person in the team to be trained on the subject. Expertise doesn’t necessarily mean silos: people still need flexibility to jump from one subject to another, especially in a fast-growing company.

4. Give everyone a voice. From the last arrived intern to the long-last veteran, joining brains is the best way to brainstorm. You need to give space for everyone to feel comfortable to raise their hands, or try something new. I’ve stole those rituals from the SCRUM/Agile methodology, but I really encourage every team to implement similar ones in their team:

  • daily/weekly standups: making sure everyone has visibility on everyone else’s work, even though it’s not on your direct scope.Spot issues & blockers quickly and increase peer working.
  • retrospectives: having regular gatherings where you can share what works well and what should be improved. It’s very important to ensure a safe space where people can complain (constructively) and share issues, and find solutions to work better together.
  • kick-offs OKRs: I love getting the whole team involved in our quarterly OKRs, and also on our annual roadmap. It ensures everyone is aligned with where we want to go and how. It also gives much more ownership and accountability on your roadmap.

TL;DR

Voilà! For those who find in too long to read, here’s a recap:

  • It’s never too early: get your HR hire as early as possible
  • Start with basics: before pumping your ride, make sure the basics are working.
  • Don’t get trapped by the 5-legged sheep: prioritise your HR needs and differentiate the profiles:
  • Talent Acquisition: your ambassadors
  • People Partners / HRBPs: your role models
  • People Expertise: your rock stars
  • Scale before you fail: anticipate your needs
  • It’s all about team dynamics: team goes before the individuals, give them the best space to shine.

HR Leader for tech fast-growing companies. Chief People Officer at Back Market.