Startups get a lot of advice. And for good reason–there are millions of decisions to be made as you begin the journey of building a company.
Some of the advice is clear-cut, and some less so. One of the most confusing piece of advice is perhaps the question of when and how a company should add HR or People functions.
There are a lot of reasons why this is particularly contentious territory:
- Tech companies often prize a relaxed environment (think: hoodies and office kegs) that blurs the line between work and social.
- Admittedly, HR doesn’t have the best reputation. It’s often associated with liability or the times when things go wrong.
- Startups generally pride themselves on being fast-moving, driven by philosophies like “done is better than perfect” and “move fast and break things.” They don’t want to get too bogged down by heavy policies and procedures.
As a result, tech startups with 100 or fewer employees have half as many HR professionals as same-size companies in other industries, according to data from PayScale.
But no matter what industry you’re in and at what stage of growth, all companies face some similar, important challenges that someone should be focusing on: keeping your company on track, creating a diverse and engaged team, and cultivating a culture your team is proud to identify with.
How HR Became People
HR’s tarnished reputation may explain why the discipline has increasingly been rebranded to “People” or “People Operations” in the tech world.
Google got the ball rolling on this trend by adopting the moniker of “People Operations” in 2006. As the change has progressed, it has proved more than just cosmetic. Instead, it’s been a catalyst to rethink the ultimate goal of the-area-formerly-known-as-HR: more data, less bureaucracy. More focus on the individual teammate, less time spent being a mouthpiece of management. More culture innovation, less legal tail covering.
If “old HR” is about managing, rules, and policies, People Operations is about designing work so that you want to be there.
So which one do you want for your team? According to Greenhouse, it depends on your goals.
- Traditional HR: ensuring compliance and decreasing liability issues
- People teams: maximizing employee value through talent acquisition and management, employee experience, and culture
At Buffer, we gravitated toward a People team.
When To Start A People Team
Buffer’s very first People team member was Deb, our former culture scout and current people success manager. Deb joined Buffer in October 2015. The overall Buffer team was more than 40 people at that point, and Buffer had been around for 3-plus years. Thinking back, the main reason we began to form a People team seems to have been our rate of growth during that time.
Consider Team Size And/Or Growth Rate
Project Include, an organization that provides resources for building meaningful, enduring diversity and inclusion into tech companies, recommends making HR one of your first 25 hires:
Someone needs to build culture, set boundaries and expectations of behavior, communicate them clearly, and make sure people comply. HR should be responsible for both recruiting and retention, and reinforce the company’s commitment to D&I. It must set up fair processes for people ops and hiring, onboarding, promotions and compensation, and performance reviews. It should drive and provide operational transparency. This includes processes like building organization charts, training for both employees and managers, building the code of conduct, and determining and implementing benefits.
Start Before You Need One
While there’s perhaps no hard-and-fast rule about when to start a People team, the main thing is to make sure someone is thinking about work structure and culture from an early stage.
From Uber to Tinder to Github, the tech world has had the opportunity to learn from many examples of leaving HR as an afterthought or eschewing it entirely.
If you’re starting a People team because:
- You’re forced to by conflict on your team,
- You want to cover yourself legally, or
- Your culture sucks,
It might be too late–and your results might not be what you want them to be.
4 Reasons To Start A People Team
An important element of starting a People team is understanding your own company’s motivation for adding this role into the mix.
Reason One: Because You Want To Change The World
Okay, startups deservedly get a lot of flack for thinking every new app will “change the world.” But people really are looking for more than just a place to work these days. In a report from the recent Great Place to Work For All conference in Chicago, Ellen McGirt shared a news bulletin about what employees are looking for from employers today:
It’s not just snacks and foosball. Across the board, employees want their organizations to be stabilizing forces in society, openly tackling social ills like race, poverty, and unequal opportunity. Everyone I talked to found this trend to be a thrilling and terrifying prospect that was going to reshape business systems and thinking at every level.
As workplace culture grows and expands to include even world culture at large, People teams are poised to be the front lines of this change.
Reason Two: Because You Care About Building A Diverse Team
Focusing on diversity and inclusion is the path I took into the world of the People team, and it remains a key priority for Buffer.
Though most startups like to keep things loose, diversity is one area where more rules and “bureaucracy” can actually be quite beneficial. Using data on young high-technology companies in California’s Silicon Valley, this study found evidence that “bureaucratization improves employment prospects for women in core scientific-technical roles.”
People teams can provide the explicit structure needed to bust bias and open the door to underrepresented groups. Without this structure, it’s tempting to fall back on hiring people like you, and place too much emphasis on the nebulous concept of “culture fit.”
Reason Three: Because You Want To Succeed
An eight-year-long study conducted during the first dotcom boom found that companies that tended to bring in HR expertise first were the fastest to go public and the least likely to fail.
Reason Four: Because You Want Your Teammates To Grow and Succeed
Perhaps the most obvious reason to start a People team might be this: You want your people, and therefore your company, to succeed.
From Google’s data-driven People Ops blueprint came Project Oxygen, an attempt to figure out exactly what makes a great manager. From the guiding question of, “What if every Googler had an awesome manager?” Project Oxygen identified eight common behaviors among the best managers–and those behaviors now guide management development programs.
The team has been able to show an overall improvement in management at Google by helping managers get better at coaching, empowering teams, managing team energy, staying results-oriented, communicating, developing teams, and sharing a vision.