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5 HR Mistakes That Startups Must Avoid

Human resources are the backbone of any business; and startups are no exception. Dealing with a number of employees within a company is not an easy thing to accomplish and it can often turn ugly, and even dangerous, for a startup. By keeping an eye out for the next 5 HR mistakes you may learn a lot about HR itself.

The Lack of Vision

No employee is likely to join a startup company for simply being paid to work – they want to be a part of something big and inspiring. Without a goal, i.e. vision, no company can properly run and by not making it clear, you, as a startup entrepreneur are risking dwindled morale and general lack of motivation. A clear vision is one communicated regularly and personally – your employees want to see the face of their leader – this is one of the main goals of human resources.

Not Knowing Local Labor Laws

When it comes to labor laws, most cities and states differ from one another. As a prime example, there is the question of payment. A common belief is that the employers are the ones who choose how their workers are paid. Rest assured that this is somewhat incorrect – each state dictates exactly when the employees are to receive their paychecks. Naturally, labor laws aren’t solely, or primarily related to money – everything from lunchtime mandates, to paid leaves varies from state to state. Get familiarized with local labor laws, regardless of whether you’re the employer or an employee.

Wrongly Classified Employees

Although this may seem trivial, unless you have your employee classification under a watchful eye, you’re risking lawsuits, or even worse. Contractors play a huge role when it comes to startups, and not paying attention to the requirements of contractor arrangements can lead to penalties manifold more expensive than annual wages. Although you can put an employee in charge of these duties, rest assured that they cannot be blamed for any mistakes made in this department. You, as a founder, are ultimately responsible for every legal aspect of your company and, therefore, should make sure that your business is in complete compliance with all laws. This is why hiring or consulting a startup lawyer to help you with the auditing process is more than a good idea, yet, unfortunately, an often underestimated one.

Disregarding the Benefits of HR Software

The technological boom that we are all experiencing has lead us into a constant state of competition with our peers, when it comes to startups. The benefits of HR software such as this one, for example, are huge:

  • Efficiency – The cloud-based world we are living in today has made every file and document instantaneously available, world-wide. Startups aiming at success should pay attention to using this benefit to its full extent, rather than merely doing so because their peers are doing so.
  • Cost – With cloud-based HR systems, businesses no longer need to spend tens of thousands of dollars on new hardware or software. This is why an increasing number of startups are going cloud-bound and focusing their remaining saved finances to other business branches.
  • Support – Cloud-based systems have enabled the business world with immediate tech-support – nowadays, learning how a piece of software works is only a couple of clicks away. This means less investment into training programs and, again, a larger remaining budget.

Business is Business

Seeing as how startups are really not all-that old, we can reflect upon their inception. Rather than companies started with business in mind, startups were often created by friends and acquaintances, providing a more of an aloof atmosphere. Rest assured though, that business will always remain business. Therefore, having a business bank account is far from a paranoid thing to do, especially when you consider all the legal technicalities out there.

The duties of the HR department include more than paying attention to complaints and keeping the employees happy – there are a lot of legal technicalities included, that you need to pay attention to. Naturally, keeping up with HR technological trends is a must.

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