Many startups and small businesses view human resources as an unavoidable cost center rather than a strategic contributor to their success. Here’s why investing in HR sooner rather than later can pay dividends in the long run.
5 min read
Opinions expressed by Entrepreneur contributors are their own.
After years of planning, executing, and building sweat equity, your business is picking up steam. The product engineering team is cranking out innovative products left and right. Customers are thrilled with the services you provide. Before you know it, you’re on track to increase your output year over year by 500 percent – or maybe even 5,000 percent! – and you realize you need to hire more people to help you achieve your goal. And you need to hire them fast.
Many startups and small businesses – viewing HR as an unavoidable cost center, rather than a strategic contributor, to their success – inevitably end up hindering this growth opportunity. Yet time and time again, when given a seat at the table early on, an HR professional or team can be as valuable as engineering, marketing, and sales. From job leveling and compensation standardization to workplace policies and benefits programs, the HR department serves as the backbone of the employee experience. If businesses push it off for too long, they can miss the chance to be deliberate in building a culture and developing people processes that can help them scale up faster and more successfully.
There’s a small window to get ahead of the workforce maturity curve before businesses inevitably have to play catch-up to hire the right employees and cultivate a deliberate people strategy. Here are three reasons why investing in HR sooner rather than later can pay dividends in the long run.
Related: 9 Ways to Turn Human Resources Into a Profit Driver
Understand business needs to adequately staff and scale
One of the most critical and difficult decisions for any leader revolves around staffing and hiring to meet current business needs. With limited time and strained resources, the question quickly becomes: Am I able to staff up? If so, where should I invest those human resources?
This is where an HR professional or team is critical. Experts in HR can conduct a needs assessment on behalf of the organization and make decisions around headcount opportunities and alignments that will best benefit the business. They can also deploy a gap analysis, which seeks to fill the gaps between the current workforce supply and the job types and skillsets required to meet and exceed business goals and capabilities.
Understanding and optimizing the hiring and onboarding process shouldn’t be left to ambitious but ill-equipped executives, fall to the bottom of the company checklist, or worse, not happen at all. Leaders can remove the guesswork and navigate the nuclear war on talent by employing the insights and dedicated support of an educated HR professional or team.
Balance both employee and employer expectations
As businesses grow, the same workplace attitudes and expectations that transformed an idea into actuality will need to evolve to bolster and engage a growing employee population. An HR professional or team can foster equilibrium between employer and employee, ensuring employees can receive the benefits and programs they need to be successful while also safeguarding the bottom line of the business. They can help leaders understand which people-centric investments should be prioritized based on their correlation with crucial business metrics like engagement, retention, and productivity.
Many small businesses and lean leadership teams, hesitant to devote headcount and funds to HR early on, choose to outsource HR. While this can seem like the most feasible approach to enhance quick-turn business initiatives and reduce spending, it often creates a significant resource leak in an area of the business that should instead be a critical strategic investment. The high hourly cost of outsourcing, though theoretically practical in the short term, could be money better spent on long-term, in-house HR support that will help the business evolve.
Related: 5 Steps to Investing Wisely in Human Capital Development
Create a strategic culture built on trust from the ground up
In the first episode of the People Purpose Podcast, I reflected on the fact that everything we do in the workplace must start with trust. One of the best ways for business leaders to extend their trust is to ensure they have the most intelligent and agile employees to propel the business, its vision, and its mission forward. The businesses that successfully stabilize and scale are built upon a strategic combination of people, products, and perpetual innovation.
The earlier businesses recognize the impact that great people and productive, collaborative relationships have on long-term financial fortitude. The earlier they can invest in programs and company culture to support those relationships through trust and empowerment. Not only is this competitive intellectual advantage good for employees, it’s good for business, too. Once HR is established as a core business component, a new set of strategic doors and opportunities is revealed. It’s the key to unlock an engaging and inspiring culture that serves employees who are better equipped to serve the business.
Investing in HR in the workplace is like bringing glue to the craft table: You don’t realize how much you needed it until it starts bringing all the pieces together. The moment that businesses big and small stop looking at HR professionals as tactical doers and start looking at them as strategic scalers, the possibilities of innovation and people-centric potential are truly endless.
Related: ‘People Enablement’ Is the Human-Resources Trend You Can’t Ignore
