People, HR, and start-ups

Start-ups are hard. All your energy is going into the business; you are faced with many challenges, uncertainty, and a serious lack of resources. Many founders have put everything on the line to get the business up and running. Scale-ups tend to be growing exponentially, often with eye-watering growth trajectories and often pushing into new markets and geographies. They employ more people to take on the tasks the founders no longer have the capacity or capability to deliver.

I guarantee you that in both cases, the last thing on their mind is HR. What they will be thinking about though, is people, and as they scale, people issues, unfortunately, tend to become more prominent and can often be extremely time-consuming for the founders and leaders within the business. Fifteen is anecdotally the magic number at which point founders tell me they notice people issues arising.

People and start-ups

Hiring talent consistently comes up in the top five issues facing start-ups. Articles in and Go Founder have hiring the right talent at numbers three and four respectively.

If you are employing people as a start-up, then there are clearly some foundational HR practices that need to be put in place. Primarily start-ups need to ensure they are complying with the relevant employment legislation. Employment fundamentals may include:
• Employment contracts
• Payroll and relevant awards or pay scales
• Superannuation and Insurances
• Core policies required to ensure compliance with employment laws

You don’t need a permanent HR person to do any of this work. However, if the business is at the point of employing people, it is worthwhile bringing in some HR expertise early on a short-term basis or consulting arrangement to ensure the relevant foundations are in place. This will enable a greater focus on where it should be – establishing and growing a sustainable and profitable business.


Scale-ups are different. Whilst there continues to be significant investment into attracting talent, all too often, there is little focus on how to lead and manage these people once employed. It is not until the founder suddenly finds themselves spending 70-80 percent of their time on people issues that they realise they may need help!

Some of the biggest challenges for a scale-up are:

  • finding the right people (recruitment),
  • providing compelling reasons for these people to join (value proposition), and
  • keeping them (onboarding, engagement, and culture).

Add to this the complexities of what to pay (remuneration), employee share plans, benefits, performance issues and potential termination of employment and suddenly, the people stuff seems quite hard.

Strategically the founder/CEO also needs to consider the leadership capabilities they will require for their growth strategy. Many executives in scale-ups (including the CEO) have grown up with the business. Some of them may be in the largest leadership roles they have ever had. A scale-up with significant growth targets should never underestimate the importance of having the right capability in the leadership group. Having the right, or wrong, talent in critical leadership roles could make or break the business.

Depending upon the size of the scale-up, some consideration should be given to bringing on a permanent HR resource. The challenge is finding all the skills required in one HR person. It is not possible. When thinking about hiring HR consider the most critical strategic business priorities facing the business – this should be the number one driver for the type of HR resource hired. If it is hiring and onboarding, then hire a gun talent acquisition specialist. Keep the HR team small, hire in consultants for specialised work where you need them, with clear deliverables and outcomes. Do not scrimp on the HR expertise when it comes to the executive team capabilities and future-state organisation design.

Many founders and CEO’s will roll their eyes when HR is mentioned. They have either experienced directly or heard through business mentors that HR will highly likely over-complicate their business, putting in complex processes, rules and initiatives that add cost for seemingly little benefit. Like most things, one size does not fit all. Hiring a ‘cheap’ HR graduate may be ok to get your foundations in place, but don’t expect them to be able to design and implement the latest performance and remuneration framework or provide the strategic advice and coaching to the CEO and executives. Start-ups and scale-ups depend on their people for growth. At some point, HR will be needed to ensure these same people are engaged, performing and as effective as they can possibly be.

Featured in Kochie’s Business Builders (August, 2021), kochiesbusinessbuilders