More often than not, start-ups refrain from hiring dedicated staff members as part of a full-fledged Human Resources department. While there might be a few benefits of cutting corners and hiring just one or two HR staff members, the disadvantages often outweigh the benefits of not prioritizing Human Resources as a startup. This vast divide between what’s needed and what’s actually done, begs the question, how does a start-up go about the process of prioritizing HR as a start-up, should emphasis be laid on creating policies, plans and internal processes for short-term fiscal benefits or should the goal be focused on long-term risks and better hiring policies.

A few important points can help companies decide the right approach they need to take while attempting to prioritize HR as a start-up.

4 Steps in the Right Direction: Why Prioritizing Is a Must for Startups

Build your company hierarchy early to plan for later

The first of these points is, creating an all-encompassing company structure document that can aid in both, present as well as future decisions for any and all HR related activities. This document should contain policies and procedures that cover topics such as workforce scheduling, outsourcing goals and any further takeovers and succession plans. Creating a design that is both effective and will work in an actual environment might take some time, but it will prevent time wastage and confusion in the future.

Build a foundation even if you can’t afford the hire

The second crucial point that start-ups need to consider right from the start while planning an HR department, is the hiring process. While most companies that are newly establishing themselves might not be actively hiring many staff members as part of their workforce, chances are when the company expands, this improved hiring process will have to be implemented. Estimating the hiring process by factoring in open positions and onboard policies is a good place to begin. Post this, it is beneficial to put in place critical elements like the structure of the offer letter as well as employee details for payment purposes and background verification procedures. Any employment agreements for intellectual property amongst others should also be planned out at this juncture.

Think about compensation and how it involves HR and Accounting

The third essential point that new firms need to work on while attempting to prioritize HR as a start-up include compensation and benefits that will be given to the teams employed by them. The basic salary structure, paid vacation details, unpaid holiday terms, health perks, retirement benefits, equity paperwork, stock options and additional insurance details should be planned out at this point. Companies that plan to offer stocks as part of the basic or add-on wages structure, should consider potential accounting issues that can arise as well as plausible solutions for these choices.

Think about templating functions of HR early

The fourth point that start-ups need to focus on while creating policies is employee relationships that can be broken down into four segments. The first part is, a policy that defines the standards of business conduct, the second part is, a feedback gathering mechanism, the third part is, an effective method to deal with issues such as discrepancies at the workplace, and the fourth part is an accurate way to evaluate employee’s overall satisfaction scores while working at the company. Creating a template that is both automated and easy to fill out by existing or future HR personnel is an excellent idea.

Other factors also need to be calculated before new firms prioritize HR as a start-up. These elements include compliance policies, health concerns, safety procedures, emergency action plans, first aid kits, and sexual harassment policies. Moreover, training techniques, development tools, and performance management tactics need to be in place while creating HR policies for the benefit of both the firm and the staff members.