In the world of start-ups, HR is at the bottom of the bottom of the heap of priorities most companies are working on. The vast majority of companies think about HR as a process and compliance function, outsource it to 3rd party providers (payroll, benefits, etc.) and doing their best to forget about it. If there’s any focus on HR as a function it is around recruiting (also typically outsourced and generally treated as very episodic). Sure – there’s plenty of talk about "culture" – of success, of working hard, of some other superlative that’s not particularly interesting or differentiating ("we want to hire great people and expect them to be hard working and successful!" duh) – but little real work done to actually execute against that and almost never someone made responsible for achieving success in people management.
I have to admit that I hadn’t spent much (any?) time thinking about this for most of my career. Companies figured out how to make sure that everyone got paid and for the most part HR was completely forgotten about. But more recently Ive been realizing that HR is an important competency for start-up businesses. The proper sourcing, onboarding, continued training, assessment and in particular the management and retention of employees can set your company apart from your competitors and put you on a course for success vs. failure.
We’ve had a number of companies in our portfolio take the HR function extremely seriously with great results. They key is the elevating HR to an executive function, hiring someone outstanding to take on the roll, and empowering that person to make real changes in your organization. This shouldn’t be a process person. They need to be the go-to person for people facing organizational challenges, having issues working with other managers or problems getting resources for the projects that the company has prioritized. They should report to the CEO (not the CFO) and be included in all senior management meetings, etc. Finding this person isn’t easy, since many HR people have been trained to be nothing more than mere paper shufflers (sorry to the competent HR professionals out there, but you all know what I’m talking about). Empowering this person won’t be easy either – most of us have been trained to marginalize HR and not view HR professionals as peers (this relates to the last problem of finding great HR pros – most of us have never worked with one and don’t know how impactfull they can be).
Most companies pay lip service to how important their people are and how their team sets them apart. It’s worth thinking about how you prioritize this part of your business and who you have managing it.