Sign up for updates

Common HRM Mistakes Made By Startups

In a startup environment, it is easy to see why HRM can be so easily neglected. Long hours trying to get a business up and running, capital expenditure, talking with investors and suppliers, developing a growth strategy – the pressures can pile up and your human resources strategy can be pushed to the bottom of the priorities list.
However, all startup founders and managers ultimately know that if the business is to grow and expand as hoped and planned for, the company will have to hire good people and manage them effectively, in order for the business to maintain its growth trajectory and reach objectives. So here are five common HRM mistakes made by startups that should be avoided at all costs:
Rushed Recruitment
All successful startups will reach a tipping point, where they need more human capital to complete all the necessary tasks within the business. For many, this tipping point can creep up fast – and almost unexpectedly. Unfortunately many startups will rush their recruitment process to get another body in the door – without regard for what will be best for the business and the individual. Whilst good planning is fundamental, it pays to pause even for just a moment and strategise your recruitment, in order to avoid high turnover or poor employee alignment that will ultimately cost more time and money in the long run.
Not Developing Formal Policies
The nature of many startups is that the business, and all policies and procedures, will grow and adapt as the business scales in operations. Unfortunately, when it comes to human resource management, this is not a viable solution. It is important that a startup develops formal internal policies as early as possible, negating any employee issues spiralling out of hand.
Underestimating Culture
Startups often do not underestimate the value of a good company culture, but the amount of concerned effort required to develop a strong culture within their business. Being heavily bogged down by work in a startup, and focusing on developing your business can often result in negligence of culture and employee-driven initiatives designed to develop the culture. Ensure you put some time aside to ensure positive employee relations.
Not Strategising Training & Development
As mentioned earlier, in a startup environment, many tasks and issues take precedence over those of a more humanistic nature. Yet particularly in a startup environment, whereby there are new tasks and challenges everyday, ensuring your employees are equipped with the necessary skills to perform effectively will have a direct impact on business success.
Poor Benefits Design
Failing to take the time to work through what your startup’s compensation and benefits packages will look like, will see your business struggle to find the talent required to move your business forward. Failing to recognise what skills your startup needs, and what the market compensation rates are for people with the required skillsets, will not lead your business to a path of competitive advantage.