When you're running a startup, your focus is on the product, the funding and getting the right people on board. You're probably not thinking about a handbook and employee policies—but you should be. And that means getting HR on board at the beginning.
Not just any HR—but good HR. You need an HR manager that has the guts to stand up to a CEO and lay out problems that need fixing, or policies that need implementing. If not, you can end up like one of these case studies in HR nightmares:
Thinx made headlines with its period-proof panties, but now it's in the news because of a sexual harassment claim against the CEO. The charges against her include inappropriate touching, talk and photos.
HubSpot's culture was described by author Dan Lyons as "a mash up of a fraternity house, Montessori school and Scientology cult." That's not what you want your business culture to be.
Uber was accused by a female engineer of ignoring sexual harassment claims. Uber had HR, but HR didn't have the strength, guts or perhaps the knowledge to stand up to the powers that be and say, "No."
How can hiring a good Human Resources manager from the start preempt these problems? And, what's more, how do you find such a person?
Look for 30- to 60-Somethings
Startups are notoriously young. In 2014, The Atlantic estimated that more than half the employees at startups were under 30. Being young isn't bad, but being young can also mean you lack experience.
Being fresh and full of ideas may be good for generating new products, but a lack of experience (and a lack of confidence to stand up for what should be done) can get a company into serious employment law trouble. An HR manager needs to have "been there, done that" before suddenly being put in charge of an entire company's human resources, even if that company only has 30 people. You need someone who knows that you need to shut down the "frat house" culture before someone sues.
Look for Legal Knowledge
An HR manager is never a substitute for an employment attorney—which you should also contract with from day one—but you do need someone with a solid understanding of federal and local laws. A lot of employment law is governed by state law, so if you bring someone in from out of state, make sure you're willing to pay for her training.
An HR manager should understand sexual harassment laws, illegal discrimination (race, gender, religion, age, etc), the specifics of laws for small businesses (i.e., the Americans with Disabilities begins at 15 employees and the Family and Medical Leave Act at 50, for instance) and record-keeping. The most important thing, however, is that he or she knows the limits and has an employment attorney to turn to when in need. Paying for a quick question up front is a lot cheaper than paying for a lawyer to fight a lawsuit for you.
Look for Someone Who Understands Employees
Yes, HR works for the business. An HR manager isn't like a union rep who fights management on behalf of the employees. But good HR people know that good people are critical to a company's success. And good people only stay with good companies.
One of the problems that startups run into is that the founder and her inner circle are willing to devote their whole lives to getting this thing off the ground. That's great! But you can't expect the same thing of your employees—especially if the employees don't have ownership stakes in the company.
HR needs to be there to say, "I know you are willing to work around the clock, and I know that we only have 35 employees, so we don't legally have to provide 12 weeks of maternity leave, but if you want to get good women on board, you will create this policy."
HR needs to be there to say, "Free lunches are awesome, but we need matching funds for a 401(k) instead. Helping our employees prepare for retirement keeps them financially secure, and better able to devote time to work"
HR needs to be there to say, "You shouldn't work all the time. You'll burn out. If you want to do that, fine, but don't expect instant replies when you text employees on the weekends, on vacation or at 11:30 pm."
HR is never the boss, so you have to make the final decisions. But having the right HR person on board from the beginning and listening to what she has to say can save you a fortune on everything from recruiting costs to lawsuit avoidance. And that's good for your business.