HR DEPARTMENT – A SETUP GUIDE FOR STARTUPS

Corporate Savagery – The cutthroat environment in which a start-up is birthed

All major metropolises in India have transformed into a breeding ground of start-ups. These incubators birth new-born companies into the domestic economy day in and day out. But such a flourishing market coupled with our talented and populous citizenry, also propagates an aggressive corporate culture and cutthroat competition. Adding on to this, it is clear that none of the companies would’ve access to unlimited resources, thereby making their allocation a priority, for all budding enterprises. To remain afloat in this sea of competing corporate contenders, one has to ensure efficient and optimum utilization of such resources, and at this juncture, the main purpose of a Human Resource Department comes into play.

Making the company efficient & risk-proof – An active role of the department

The managerial substructure of any new business entity is often unkeen upon setting-up an HR department. Any foundational team generally get engaged in research & development, marketing, production efficiency or several other factors which supposedly drive a company’s growth. But it is a highly straightforward but lesser-known fact that, the company’s employees are the most important factor siting on the driver seat of its growth.

In addition to this, an HR policy can be of help for start-ups in making their contemporary and futuristic business choices, especially with those decisions that are concerned with workforce arrangement planning, contractual outsourcing for some projects, and or the way-down-the-line plans of company’s succession.

Channelizing the talent has a direct effect on your turnover

Company’s HR department has an unswerving correlation with bankrolling its profits. It may seem like it is just about management of the employees but it is much more than that. It is about skilful administration of your company’s talent resource. If you set a code for the way you want to conduct your business, it mainstreams the founder’s mentality into his/her employees.

An HR department also channelizes the workplace productivity of employees, thereby increasing the profitability of every man-hour spent on doing the company’s job. Therefore, the role of this department is also glaringly reflected in the quarterly fiscal projections.

Should you not start HR, unless it is absolutely perfect?

Start-ups don’t always require an all-encompassing organizational structure but rather, just a standard document defining the company’s structure and encapsulating only the most essential and basic factors of smoothening the workplace administration, that are most common denominators amongst all other companies. Perfection is a myth when it comes to HR department. Nothing can ensure a perfect workplace advancement, but it doesn’t mean that absence of HR is going to your company any better business. The possibility of organizational errors in HR shouldn’t deter a founder from instituting an HR department.

What exactly are HR policies? – Articulating the specifics now

For the purpose of a start-up, an HR department is mostly limited topolicy creation for countering professional risks involved in the particular business. The department essentially strives to lessen the company’s liability in any potential breakdown and prescribes an organizational arrangement for conducting the company’s business. This helps in mitigating all the operational loopholes in the company’s day-to-day business.

Potential investors generally feel secure when they see a concretized HR department in your company. The legally backed crystallization of your code of conduct essentially signifies that the company is equipped with robust managerial substructure, an acceptable and inclusive work culture and also a specific vision for the future. Some HR policies, if enforced efficiently, can account for a better work-life balance and an overall elevated employee experience.

Be that as it may,creating HR policies and ensuring compliance with corporate statutes should not be limited to fishing for a perfect IPO or to get your next round of funding. A better employee experience creates a reputation throughout the market that the founder of this start-up cares about his/her employees and pays heed to their professional demands and comfort. This reputation in turn attracts better talented employees towards the company, which is consequently beneficial for bolstering the workplace productivity and economic profitability.

Kickstarting the HR Department – The average HR policies

If a start-up desires to jumpstart their Human Resources department, then they should proceed with some preliminary pioneering policies which keep a check upon the professional ethics oftheir employees. For doing so, the companies can employ the age-old, carrot and stick approach. Incentivising ethical behaviour and reprimanding the unethical by retraction of employment perks, is the quintessential way of enforcing such HR policy on behavioural ethics in a workplace environment.

Next, one should reserve their company’s right for changing the HR policy whenever it is deemed necessary by the department. This ensures company’s control over the policy and lends a much-needed flexibility to it, for adapting to the changing needs of time.

The founder must ensure one thing in particular, that the company’s HR policies are tailored and geared towards the specific needs of his/her start-up. Moreover, the HR policies should not only be custom-made but also realistic in nature. Non-achievement of the policy goals can discourage the morale of the whole company. Also, one should simultaneously implement the policies after they’ve been ratified, authorized and sanctioned by the department, so as to avoid any possible confusion ormiscommunication of the newly instated policies to their employees.

The ‘To-do List’ for your freshly minted HR department

As regards to HR policies themselves, it is better to begin with instating an employee compensation and benefit scheme in accordance with the accounting team of your company. A supervisory committee can be instated which acts as a big-brother of all other departments in your company and has a finger on the pulse of each one, meaning that, the HR department is in personal touch with employees from all other departments of your company.

Now onto the checklist comprised of some standardized HR policies which can be aimed at by the newly instituted HR team.

a) Contracts governing the employment of your workers: - Cover all employment related documentation. Refer, draft in accordance and essentially comply with labour laws and wage related statutes.

b) Ethical conduct at workplace: - This would include dress code, behavioural code, personal time guidelines, inclusivity guidelines, etc.

c) A policy for governing severance packages:- Remember that gratuity is more than just a token of appreciation. Refer to and comply with the Gratuity Act, 1972 for avoiding any litigative problems post-retirement or termination of employment. It is employee’s right to be protected by the company which he/she has served for a prescribed duration. Therefore, the company would need to pay an employment provident fund, again according to the relevant statutory guidelines.

d) A policy outlining the conditions, duration (in number of days) of employee’s leaves:- When a leave can be unpaid, will the leave days be indefinitely accumulated or will they eventually lapse, what happens in case of a maternity leave application, all these are important considerations in this policy.

e) A policy against sexual harassment at the workplace: -  Look no further than the Vishakha guidelines for Prevention Of Sexual Harassment(POSH) which were delineated by the Court and also refer the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 for framing this policy.

Other policies may include, policies on issues such as: - Termination of employment, Non-discrimination in hiring, promoting or firing, grievance and complaint filing, objective performance appraisal, work hours for work from home, awards and recognition for exemplary service, etc.

BY-

Kedar Ganesh Dhargalkar