The changing roles of HR in startups

Startup ecosystem has been very strong in India and is among the top 3 in the world, according to IT industry body Nasscom. According to the data, over 1,300 startups added in 2019, over 8,900 tech-startups exist in India now. A common theme across all startups is that they operate in a very volatile environment. They run the risk of insufficient capital, or redundancy or general inability to compete.HR has a key role to play in the entire process of identifying, selecting, engaging, and retaining top talent. Adapting to the changing environment and being ahead of the curve are critical facets of successful startups and HR has to play a role in preparing the organization for that. 

Hiring the right fit for the organization and its context is of paramount importance. Behaviorally people who thrive in such environments are the ones who can work with ambiguity, can take quick decisions with limited information, have a high-risk appetite, and are generally not so perturbed by lack of structure and standard processes. The right fit to the startup environment is often more critical than the functional expertise that one brings on the table. 

Most startups are striving to keep their costs low and may not be able to or willing to shell out large pay packages. To attract quality talent, the arbitrage is often offered in terms of larger responsibility, stock options, or challenging work environment and an opportunity to build business/function from scratch. In a volatile environment that demands thinking on your feet, quick decisions – empowerment goes a long way in a sustainable and growth-oriented setup. Empowerment flows from trust and creates a culture of ownership and accountability which are key drivers for success. Job design and compensation structuring are therefore also areas where HR plays a critical role.

In this dynamic marketplace and with the advent of the gig economy, HR processes and structures also must be adaptable to the different forms of engagements and employment contracts that the candidates may demand. Also, the key to engagement is constant communication with the employees. If they understand the progress, the direction of the organization, and its context then there is a higher chance they are aligned to the organization and contribute more effectively to the achievement of overall goals and objectives. Losing a quality talent in critical phases of evolution can hurt the organization the most.

But the biggest contribution HR can make is to shape the organizational culture itself. The purpose which inspires, values that aligns behavior and a work environment which makes people constantly think of different ways in which they can positively contribute to the organization can be a long-term goal of HR in startups

In startups, therefore, HR will have to wear multiple hats during various stages of the organization. It carries the responsibility of hiring the right fit candidates, promoting a culture of ownership and accountability, adapting to the changing organization realities, and employee needs. To deliver all of this HR will have to be a mentor for the young leaders, will need to often act as the listener for employees trying to cope with ambiguity, and has to become an employee champion in working towards collaboration and team bonding. And it’s a Myth that it needs to be someone from the HR department or from HR background who has to play the role of HR. In early-stage successful startups, often the role is played by the entrepreneurs themselves.