Jyothika Lobo | September 22, 2017

Why is HR an important function in a startup?

They say it takes a village to raise a child, and building a startup is no less a feat. While the onus of making the startup succeed rests on the founder(s), he/she need not traverse this journey all alone. Reaching out to mentors, who can be an effective sounding board and guide during the initial phase is proven to have been advantageous to many startups. In a survey conducted by Micromentor.org in 2014, they found that, “those who received mentoring increased their revenue by an average of 83%,” and, “those who did not receive mentoring only increased their revenue by an average of 16%.” (Source)

At an early stage of their startup journey, entrepreneurs frequently find themselves in situations where they “don’t know what they don’t know”, regardless there has to be traction, and important decisions have to be made. This holds true not just for the larger business matters but some critical functional aspects as well. The question I often get asked is – “we are only a 10-member organization, do we really need to get into the bureaucratic rigmarole of looking at HR function as a necessity?” Here’s my take on this - With the very first hire any founder makes, the focus organically shifts a bit from the product or solution that the organization has to offer, to developing strategies for recognizing and motivating the team members.

More often than not, the founder plays the role of the go-to HR person for a significant amount of time in the early stage of the organization. And going through this initiation period is important and critical for the founder to understand the organization’s growth in a holistic manner. While the typical day-to-day operations of recruiting can be addressed by roping in the core team, the larger strategic question of what kind of a team is needed to help take the organization forward, how to strategize for effective reward systems considering limited source of funding, what is the culture practice the organization will adopt, etc. can be addressed by working with a functional expert or mentor.

In my role as a functional advisor at Villgro, I am helping the incubatee organizations in articulating their people practices. With this exercise, some of the founders are able to make the best possible decision at any given time. For example, having a clear Compensation Philosophy, HR advisory board to sound off on offer decisions and a practice of checking for internal parity has helped the founder of a Healthcare start up feel more confident about his hiring practices. However, I must caution, having a functional advisor does not absolve the founder from their responsibilities as people managers. On the contrary, this might just ‘’add’’ to their responsibilities as they may be forced to think through and strategize around aspects they did not know existed or assumed were not important in the larger scheme of things.

Figuring out what people practices work for the organization’s culture and helping them incorporate such practices in their daily operations is what I find to be most rewarding in this role. Another aspect that has me excited is the opportunity to leverage my learnings from one organization to another. While each organization is unique and there are no cookie cutter solutions when it comes to people management, getting to observe patterns & trends that help in making more confident decisions is what makes the effort worthwhile.
Villgro provides a fantastic platform to entrepreneurs to access functional advisors & mentors through its Technical Assistance Program (TAP). Whether you are on your way to become an entrepreneur through your social impact idea or a mentor who can offer your expertise and skills to such entrepreneurs, Villgro should be something you must consider to help you navigate through this exciting journey of making an impact to the society at large.

(Want to be a functional mentor at Villgro? Write to us here)