LAST REVIEWED Apr 02 2019 10 MIN READ
By Anisha Sekar
When you’re the founder of a startup, you wear a variety of hats to become whoever you need to be at any given moment: sales rep, copywriter, engineer, customer support, bathroom cleaner – and that’s on top of the “typical” leadership work of building a product, securing funding, and devising a go-to-market strategy. Often, your first hires will focus on product, sales and marketing – human resources typically won’t make an appearance until your headcount passes 25.
That doesn’t mean HR needs don’t exist, though – the crucial work of keeping your team happy and productive starts with your first hire. Whether you’re the COO of a small team (a catch-all role that counts people ops among its many responsibilities) or the CEO and head of the company, here are the five people ops roles that you’ll need to fill on your own before you make your first HR hire.
Recruiting is arguably your most important function as a founder: High-quality culture fits who can work autonomously are crucial to early-stage growth, and bad hires can tank even the best products. Even after you’ve brought on a full-time recruiter, you’ll want to be deeply involved in the hiring process – some CEO’s continue to interview every hire even when their headcount is in the triple digits.
Hiring top talent is, as you can probably imagine, insanely competitive, so you should build your recruiting pipeline well before you need to make an offer. As Michael Tanenbaum, founder and CEO of ConnectCubed, notes, “you need to hire just before you need the person, not before, not after.” Sourcing candidates early means you won’t have to scramble or settle for less-than-perfect talent because you need manpower ASAP.
Andrew Stoe, head of talent at Asana, recommends that founders spend 30-40% of their time recruiting – without that level of dedication, he says, it’s tough to build a good team. Reach out to your network for warm leads, ask your investors to keep an eye out, and post jobs on AngelList and LinkedIn. Peter Kazanjy, co-founder of TalentBin, offers a great primer on leveraging your network for recruiting in this First Round Capital article.
2. Benefits administrator
More and more, employees expect benefits like health insurance, a 401(k), and commuter subsidies from startups as well as big companies. Until you have a dedicated office manager or people ops lead, you’ll be in charge of setting up and administering those benefits.
Luckily, this is one area that’s easily outsourced. Payroll companies like Gusto or all-in-one benefits companies like Zenefits have turnkey products and startup-friendly pricing. Here at Human Interest, we want to make retirement benefits as accessible as possible, so we offer easy-to-administer and affordable 401(k) plans for companies of all sizes. And our 401(k) syncs with both Gusto and Zenefits! (It’s worth noting, too, that company-matched 401(k)’s offer more tax advantages to both employers and employees than regular salary increases).
While you can easily outsource many aspects of this role, you do have to stay on top of local, state, and federal regulations. As your company grows, more regulations kick in – for example, you must keep injury and illness records once you hit 10 employees, while companies with at least 50 employees must comply with the Family and Medical Leave Act. Talk with your local Small Business Administration office or check message boards to make sure you’re in compliance.
Related article: Outsourced Benefits Administration
3. Compensation guru
Deciding compensation isn’t nearly as easy as looking up average salaries on Glassdoor. You can probably pay less than a larger company in exchange for growth prospects and impact (and, of course, equity), but don’t expect to bring in great talent with deeply discounted wages. Investors and other entrepreneurs are a great resource for salary benchmarks to begin your negotiations.
But compensation questions aren’t laid to rest once the offer is signed. You may be able to sign employees to a lower salary with the promise of a six- or 12-month pay review; if you make that promise, stick to it or risk a backlash. Depending on your financial situation, you may also want to consider unexpected bonuses for incredibly high performers – turns out that unanticipated rewards are better motivators than regular ones.
Compensation can be a huge factor in the success of your sales team. Aside from setting quotas, you’ll want to create a pay structure that incentivizes hard-hitting sales efforts, but discourages scorched-earth policies that get customers in the door no matter the price. Here’s a guide to get you started on building a sales compensation plan.
Related article: What Defines a Competitive Compensation and Benefits Package?
4. Office manager
The idea of founder-as-janitor has become a bit of a cliche, but certain aspects still hold true: Until you actually hire an office manager, it’ll be on you to make sure that food gets in on time, that your office is conducive to productivity, and you aren’t bleeding money on luxuries. Some aspects can be outsourced – lunch catering companies abound, and startups like Eden provide as-needed cleaning and office maintenance.
You’re also tasked with finding the office itself – and you’ll probably move multiple times as the company grows. As with recruiting, you’re better off starting the search process early. That way, you can keep an eye out for good deals and locations, and avoid productivity hits due to an overcrowded office. Finally, building long-term relationships with a commercial real estate broker can get you the first look on new spaces.
Related article: Small Business Insurance Policy Basics: Liability and Property Insurance
5. Company therapist
Last but certainly not least, you’re responsible for the emotional health of your employees and the company as a whole. You can’t afford to let problems fester or poor culture fits stick around; you must be proactive about keeping your employees happy and productive. You may want to schedule regular one-on-one meetings with each team member to make sure everything is going well; employee happiness should aso be a regular agenda item in founder meetings. Some companies pay for “pulse survey” apps to get feedback daily, rather than yearly, and diagnose problems early on. Others simply make the leadership team accessible and foster a culture where employees feel comfortable speaking up.
You should also proactively implement policies to prevent burnout and foster creativity. Consider mandatory vacations or setting the expectation that employees shouldn’t answer emails after a certain time. Make sure different team members interact with each other regularly, and encourage professional development either through mentorship or through outside classes and workshops.
Related article: 5 Ways to Evaluate Employee Happiness
As a startup leader, you have more hats than a haberdashery. But even though finding product-market fit and securing capital are important, building a company is even more so – finding talent, ensuring productivity and happiness, and keeping the office up and running. While some of those tasks can be outsourced, for now, your most important role is the people ops founder.
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Image credit: Roman Drits
Anisha Sekar has written for U.S. News and Marketwatch, and her work has been cited in Time, Marketplace, CNN and more. A personal finance enthusiast, she led NerdWallet's credit and debit card business, and currently writes about everything from getting out of debt to choosing the best health insurance plan.