TFW you’re the first HR hire

An HR person isn’t usually among the first hires of a startup, but there’s an opportunity to build something from nothing when the first HR person comes along.
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5 min read

In The Dropout, the series dramatizing the rise and fall of blood-testing startup Theranos, the company is depicted as dysfunctional to the core, with myriad culture and staffing problems that piled up on top of its fundamental, uh, technical difficulties. Watching the show from the perspective of a reporter for this publication, I could only wince and wonder: Did Theranos even have an HR team? (Answer: It did, the Wall Street Journal reports.)

Some argue that an organization doesn’t need to bring on a full-time HR person until it has ~100 employees. However, in a blog post on startup accelerator Y Combinator’s website, Renee Mars, its director of people ops, wrote that having a solid HR team in place helps startups scale and avoid potential personnel problems. Launching an HR department from nearly nothing and building it alone might sound like a daunting task, but the HR directors we interviewed say there are ways to make the process easier.

Kate Velasquez, director of human resources at ASG, a technology-focused holding company, said she has built HR teams from scratch “a few times” and has found that companies often need to hire an HR person before they think they should.

What have we here? Velasquez said that even if you’re the first HR hire, there are likely certain systems already in place. She recommends asking for a handbook, information on where employees are based, and the type of employees. She said, “Even if there’s been zero HR people, most companies—if there’s more than three humans to know, or 10—there are some natural processes and orders of operations that take shape by way of human beings working together and needing to get business done.”

She says a new HR person must ask themselves, “What are the core things throughout the employee life cycle that need to be in place when [employees] get hired?” That spans everything from developing job descriptions and training to culture development and offboarding.

During her first 90 days at ASG in 2018, Velasquez said she focused on auditing and understanding the business and its people. She conducted a listening tour, getting an understanding of the nearly 200 employees and 10–12 businesses housed under ASG, and got a grasp of potential gaps in the systems and employee sentiment.

Being a holding company, Velasquez had to determine if ASG would move all HR operations into the corporate entity or allow subsidiaries to continue operating some of their own HR programs. She ultimately decided on more of a hybrid model, where some HR functions, like payroll and employee experience, were managed at the corporate level, and day-to-day operations would still be run by the companies ASG owns.

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When Sarah Flaherty joined as head of people at Orum, a fintech startup, in 2020, the company had approximately 20 people, and had to build an HR program beyond the infrastructure of payroll and health care benefits. Orum already had company values, but needed concrete human-resource frameworks, from interview processes to comprehensive benefits planning. “I took our four values and I identified interview questions that we’d want to use to help candidates calibrate with those values,” she said.

Remote controls. According to Flaherty, Orum needed guidelines in “how we work together [and] when we work together” so she created a company-wide communication philosophy that streamlined processes across email and Slack, and outlined working hours for each team.

When in need of help, Flaherty, who has since been promoted Orum’s VP of people, said she relies on other experts and professional organizations like TroopHR. She didn’t start with a blank sheet of paper, but rather looked at what other remote companies were doing and took advantage of other free information available to HR leaders.

When the tasks are clear, the next step is leveraging HR technology to save time and streamline some HR functions, Flaherty and Velasquez said. Flaherty uses a professional employer organization (PEO) for tasks like compliance, payroll, and benefits selection, allowing her to focus more time on culture.

Velasquez uses CultureAmp for employee engagement across all 1,000 people in the ASG network and its 45 subsidiaries. She also recommends using a centralized payroll system to simplify compliance and payment operations.

Doubling up. As a company continues growing, solo HR departments need to determine when it’s time to bring on a second person. Velasquez explains that the complexity of a business “is equally as important as headcount in [deciding] how many HR people you need, Because that changes the dynamic of programs that you have, including people management, not just compliance, but across the board.”

Are you up for a challenge? Velasquez says that it takes somewhat of an entrepreneurial personality to start an HR program, and it’s OK if a person prefers to join an HR team that’s already a well-oiled machine. She explains that while the job of starting an HR department from the ground-up is difficult, “you can move through space and create a lot of impact, and work with a lot of different people, which is really exciting.”KP

Do you work in HR or have information about your HR department we should know? Email [email protected] or DM @Kris10Parisi on Twitter. For completely confidential conversations, ask Kristen for her number on Signal.

Quick-to-read HR news & insights

From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.