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The trouble with human resources is that it’s too often “last on, first off.” Not due to any fault of HR people, per se. But the vast majority of founders (especially first-timers) are not HR people.
Not only do founders usually come from a sales, marketing, finance or operations background, but they’ve also likely bought into the outdated narrative that HR is some sort of “necessary evil,” a cost center and talent backwater that only drags the company down into compliance and procedure, stifling the “move fast and break things” credo.
Fast growth often covers up many problems for months, even years, until things fester beyond the point of no return. HR is not the least of these. In fact, in my experience, it’s the most common such problem.
As long as a company is growing quickly up to 150-200 people, the founders can often “get away” with just a recruiter and HR coordinator or even director, as long as there’s a recent funding round or other PR working hard to bring in a pipeline of talent.
Then, at some inflection point, growth is no longer enough to mask the chaos of poor compliance, bad and expensive benefits, long hours and below-market compensation. People start to leave, disenchanted by the gap between words and deeds, the stated mission and vision and the dysfunction inherent to founders involved in far too many small details. Morale drops and talent pipelines dry up.
Suddenly, there’s a need for some “adult” (strategic) HR in the room to clean house, plug the gaping holes of compliance and procedure, uneven pay and less-than-ideal (usually non-existent) D&I processes, as well as developing better benefits, hiring, learning and development, improved communication and productivity.
It’s no easy task, and expectations are sky-high. There’s never enough of a budget allocated (remember that “cost center” fallacy), the projected timeline is always too long and buy-in is spotty, at best. Inevitably, the VP of HR or CHRO brought in to fix a heaving mess, gets zero onboarding (because that’s one of the sore points he or she must fix to retain new hires) and is expected to perform miracles in next to no time.
When the founders decide to “pull the trigger” on hiring a head of HR, it’s almost always because they’re under great pressure from their lean, swamped and overly tactical HR team, board, co-founders and team leads. And with pressure often comes forced and suboptimal decision making.
What is the usual profile of the hire? He or she is generally coming from a larger company as a #2 or #3 under the CHRO, a few years off from doing tactical HR work such as filing compliance papers and implementing systems
It’s no surprise, then, that so many initial strategic HR hires don’t work out well. So how can fast-growth companies fix their HR conundrum and avoid all sorts of serious HR issues by building up their HR team in a timely manner, yet not be gun-shy about hiring a strategic head of HR?
The truth is, there’s no simple and elegant way to “split the baby.” That said, there is a provisional solution that helps to build an effective bridge between tactical mastery of HR and a sound strategy to underwrite further growth and scaling.
This approach is to hire an experienced consultant as Interim head of HR, someone who can both do the heavy lifting of making the proverbial trains run on time (benefits, payroll and other system implementation, plus talent acquisition, performance management and employee engagement) and also do the strategic work of improving communication flow, coaching employees, and creating playbooks, policies and procedures, as well as delivering training for personal and professional development.
Such a consultant can not only “clean house,” but also train and empower the existing HR team to level up to a more strategic level, ultimately elevating generalists to a director level and enabling them to work on more strategic projects.
How can a founder find such a unicorn talent, you might ask?
We are living in the Golden Age of Consultants and Freelancers, with thousands more joining the ranks seemingly every day. Not least among these hordes of free agents are former heads of HR from large and medium-sized companies who went solo. There’s no shortage of available talent.
And how can a founder make sure that the consultant succeeds? After all, 4 out of every 5 “digital transformations” fail miserably.
1) Find an experienced (and authentic) communicator and coach who will go out of his or her way to go deep with each employee to discover their story, current challenges, career pathway and pain points at work.
80% of all issues in fast-growth (and all other) companies have to do with poor and infrequent communication that’s tone-deaf and anything but caring.
2) Together with your consultant, before you even hire them for a prolonged engagement, create a detailed plan and timeline for your digital transformation. Look carefully at how you currently do (and how you want to run in the future) internal communication, project management, performance reviews and feedback, employee engagement initiatives (learning and development, rewards and recognition, total compensation including salary bands and benefits and perks), company wiki and team playbooks, among other things that need standardization and automation, creating clear delegation and decision workflows and business continuity.
3) Empower your HR consultant and team to lead your digital transformation, not your IT. Nothing against the IT guy or gal, but that’s not where the bigger vision comes from.
4) In concert with your consultant, over-communicate your vision, mission and values at every opportunity. Do a weekly Zoom with the whole team and tell them about all the cool things your various departments are doing. Create a culture of peer and manager recognition. Focus your efforts on creating, maintaining and smoothing relationships among your team members.
5) Work with your HR consultant to Identify and develop the people who are “nodes” in your organization. These are usually the hardest-working, most passionate and committed people who really make your culture. They’ve usually been around a while and have built up important parts of your company. Keep them around, give them more autonomy to make decisions. Empower them to hire more people to their team, and to suggest and implement better tools and decision workflows.
The right human resources head can transform your business
When you take this approach, you will not only save a lot of money and time by de-risking, but you will also help ensure the success of either a homegrown head of HR who grew from director-level from within the company or otherwise create a ramp for a higher-level head of HR coming from a larger company to focus on strategic projects from the start.
If you ignore this approach and take the plunge with an expensive hire, you’ll likely regret it after wasting months and tens of thousands of dollars on a doomed scenario.
Choose wisely and here’s to your continued growth!