Not Business As Usual: HR primer for entrepreneurs
For many entrepreneurs, the idea of Human Resource management is often a topic they associate somewhat remotely with “big” business. Yet when you understand what HR management involves, you begin to recognize that this is probably the single most important strategic focus of a business, second only to whatever was the “great idea.” Said differently, sustainable success can only come through talented and committed people so the ability to attract and retain such individuals is the foundation for success.
As long as an entrepreneur remains a company of one, the importance of HR management is not great. But the minute the decision is made for that first hire then HR comes into play. Traditionally HR functions have included recruitment, selection, training and development, performance appraisal, compensation, and labor relations. For the startup entrepreneur, however, the recruitment, selection, compensation and training and development functions are of primary critical importance. Unfortunately, it is in these areas of critical importance that lack of expertise of the basics can multiply into costly mistakes.
Please consider for a moment the aspect of recruiting. The idea of identifying and attracting qualified people to apply for vacant positions implies a couple of existing conditions. First off, the position of vacancy has to be defined in terms of activities to be performed and secondly, it is defined in terms of skills needed to perform the activity. The single biggest cause of startup mistakes in hiring is the entrepreneurial owner’s lack of discipline in doing these two tasks. “Doing” in this regard involves thinking through the answers and then writing them down. Ideally, out of this exercise should emerge the copy for some type of announcement of the opening. And ideally, the channel chosen should be one that is accessed by a high number of individuals who have the skills that you are seeking. Just remember this is an advertisement and, like any good advertisement, you are selling something. In this case it is your company and the exciting opportunity to be a contributor to something of importance.
Once the applications or résumé’s start to roll in, the selection process now takes over. This is simply the process by which you choose the right candidate for the job. Now the dangerous trap here is not having a clear application of the required skills matched with the applicant’s competencies. The simple remedy is to devise a test. See first hand if the applicant can do what it is you need to have done. Try not to assume that they “can learn it.” You are not running an apprenticeship. You have a critical need for your company to grow and prosper and by not getting the best candidate within your limits, you jeopardize this opportunity for growth and prosperity.
Now that you have found this person whose proven skills match up with your needs, you have to come up with a compensation program that matches your ability to pay with the applicant’s requirements. This is a tough point for many startups but there are ways to package the offer to achieve both of these goals. We’ll cover some of these in our next column.
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