When you are just getting your business started you may not think about human resources. It could be that you’re the only human whose resources you’re using! The truth is that it does not matter how small or big your company is.
If you’re running a business, then you need to have a few HR basics in place. Cover these five core elements to build a scalable foundation for your human resources needs.
1. Lay out a vision.
Strategic planning isn’t often considered part of human resources, but it’s important to make sure everyone on your team is working toward the same goal. Having a clear mission, vision, goals, and strategies will help you attract talent and keep your team in sync.
When employees have a clear understanding of what you’re doing and where they fit in, they’re better able to do their jobs. Prepare for success by identifying benchmarks for achieving the company vision and planning a way to publicly recognize employees who meet them with accolades, like trophies and awards.
2. Prepare an employment/independent contractor agreement.
An employment contract is a document that defines the expectations of your employees and company in a working relationship. This can set the groundwork for things like benefits, hours, working space, hierarchy, and more. This applies whether you’re planning on using employees or independent contractors. It’s a good idea to have three versions of this prepared: salaried employee, non-exempt employee, and a version for an independent contractor.
3. Create a basic training plan and documents.
What does your company do? What do you expect from employees? Answering some simple questions from the start and following through with regular training sessions is one of the best ways to keep your employees productive.
Organizing training will provide employees with a clear understanding of the company and create an opportunity for bonding and brainstorming. At a minimum, make sure that you have a plan and supporting documents like PDFs or slideshows to get employees up to speed on the information they need to know to do their jobs.
4. Define a payroll process.
This may seem excessive if you only have one or two people onboard, but there are some real benefits to doing this early. It will create a framework for you and future employees to track and quantify work time. That’s important because you need to know how much your time is worth and how much of that time each part of your business costs. Many merchant service providers like Square, PayPal, and Wave now offer payroll services. It’s a convenient way to consolidate services and streamline the process of paying employees.
These companies also offer great tech support to help you get everything set up. Finally, make a payroll schedule and stick to it. Even if you’re only paying yourself $1, make sure you go through the motions of tabulating hours and processing payroll on your company schedule. Mastering this on a small scale will make it much easier to transition to payroll processing for a larger team.
5. Measure employee performance.
You’ve probably heard the business adage "what gets measured gets managed." It’s certainly true when it comes to employee performance. And if you think you’re too small to have performance reviews, think again. As a lean startup, you cannot afford to have ineffective employees. A defined performance management process is critical to know how you and your team are performing and have a process to make necessary adjustments. When you make your employee agreements, include a process and schedule for evaluations. Determine which metrics equal success for your unique business and detail a way to measure them. Be sure to combine those quantitative metrics with qualitative ones like shadowing and sit-ins to make sure you’re getting a full picture. Establish a standard for rewarding good performance and addressing poor performance.
Take the time to put these five fundamentals together proactively to save yourself from scrambling on the back end. Revisit the content every 3-6 months to make sure it is complete, up to date, and aligned with the direction of your startup.