Most of what I learned in business I learned working for Silicon Valley start-ups.
Yes, the twenty years of corporate experience certainly helped prior to my first start-up gig. But I was not prepared for the total and 100% focus on growth and the different set of priorities a start-up has compared to established ventures.
The (very) last thing a founder of a start-up wants to worry about is HR.
Founders need to focus on their core business. HR is very important to any business, but at an early stage, having this function in-house is simply not a priority. Founders of start-ups need to focus on the product, customers, sales, and building a culture that attracts and retains best in class employees. Many founders are young and entrepreneurial but lack the breadth of experience to effectively manage all aspects of a rapidly growing organization.
But at the same time their investors are pushing them to do more with less and do it faster.
This is why outsourcing HR is vital to the success of a fast growing start-up. Many founders do not have the expertise (or the time) to manage the HR function, and should not be doing it anyway.
Limited resources are best spent in the areas of sales, product development, and engineering – all roles that have a direct impact to driving growth.
Yes, HR is a necessary function and one that cannot be ignored. At a certain stage in a company’s evolution, HR should be brought in house, but not too early.
Why outsource your HR function? Because growth.
If you’re reaching that point of scaling your organization by adding staff and converting contractors into employees then you’ll need HR systems in place. That’s just good business, and it helps to get your HR systems right from the start – mainly so you don’t have to go back over and do them again as you grow from 2 people into 200 people. You really want to get this right from the beginning.
But this doesn’t mean that you need to employ a full-time HR person – not yet at least.
There are many substantial benefits to outsourcing your HR including:
- A turnkey approach: Why reinvent the wheel when there are well-qualified and industry-relevant HR consultants ready to implement proven HR programs immediately?
- Control your burn rate: You can save money, reduce operating expense and improve efficiencies by outsourcing your HR.
- Outsourcing to a qualified HR firm will give you both the transactional, everyday support of HR administration AND the power of Strategic HR consulting.
- Stop worrying about HR compliance and legal risk: A good HR consultant will ensure that this is all handled outside the organization.
- Flexibility: Use HR where you need it and when you need it.
- Experience: The breadth of experience offered by outsourced HR firms is far greater than you could afford having it all in-house at this stage.
Even if you wanted to bring HR in-house, good luck finding the right kind of multi-skilled HR professional who is well versed on everything you need from compensation to leadership training right through to strategic HR.
A good HR outsourcing firm with give you both the transactional expertise and an experienced, well-seasoned HR executive who can operate as a coach and advisor on many aspects related to your business. By implementing a team approach to HR not only impacts your bottom line, it just makes good business sense.
Need help Outsourcing your HR Function in the Bay Area?
Our clients come to us looking for adaptable and scalable HR solutions for start-ups and rapidly-growing companies. We can help you in a variety of ways, just email firstname.lastname@example.org for more information.