How would you answer this question?

“What’s your favorite part of being a founder or business owner?”

The first thing you thought of probably wasn’t, “being an employer of record.”

But you are an employer. And if you want to lay a solid HR foundation at your startup, you need to think and act like one.

Don’t Skip This: You Need To Embrace Being an Employer

Building a team and establishing a thriving company culture are some of the more exciting aspects of an employer’s responsibility.

The mundane HR functions, though?

Those probably aren’t getting you out of bed in the morning.

Yet, they’re vitally important to building a successful company. If you avoid them, you’re putting your business at risk of struggling with things like employee retention, recruiting new talent, and compliance.

This is the problem many startup founders and CEOs face. While they highly value building a  great culture and implementing efficient HR operations (such as onboarding, payroll, and benefits enrollment), they don’t have enough time to attend to these responsibilities. And they probably don’t enjoy the tedious tasks required to complete them.

It’s not easy to find several hours in the week to focus on something that doesn’t directly impact company growth.

To do so, you have to change your mindset from being solely a founder to also being an employer.

As a startup founder and CEO, it can feel like HR is just the necessary stuff that often gets in the way. As an employer, however, it’s the stuff you have to do to keep your business running.

Prioritizing Low Priority Items: Making Time for HR

Even when you embrace your role as an employer, it’s still not going to be what you spend the majority of your time on — nor should it be.

What it does help you do is not forget about it or ignore it completely.

Think about it like this. You have four main areas of focus as a business owner:

• Customer loyalty
• Operational excellence
• Results of the business
• Employee engagement

Nearly all of your time as a startup founder or business owner can be categorized into these four areas.

The majority of your schedule is — and should be — filled with tasks related to the areas of customer loyalty and the results of the business. These tasks emphasize your product or service, sales and marketing, strategy, and finances. They’re the things that directly influence revenue.

Operational excellence and employee engagement tasks include things like your tech stack, establishing systems and processes, team building, recruiting, and HR. You recognize their importance, but they typically get pushed to the side in favor of things directly tied to revenue.

When you’re planning out your weeks, months, and quarters, thinking about the various roles you have as it relates to these four areas can help you effectively manage your time and carve out the appropriate space to focus on each of them — including HR.

So, how much time do you need to set aside for HR?

One founder tracked his time for two years and spent about 2.4% of his time on things like legal paperwork, HR, and taxes. But in reality, there’s no definitive answer here.

The best place to start is to identify the “must-haves” — things you absolutely need from an HR perspective. Then, from there, prioritize everything else and plan out when you’ll tackle them.

The rest of this blog will cover the HR “must-haves” that you need to immediately prioritize, and then explore some of the “nice-to-haves” that you should be thinking about as you continue to grow.

HR “Must-Haves” for Startups

Here’s what you absolutely need to have for your HR startup:

• Employee contracts
• Payroll and benefits
• Employee handbook
• Compliance and legal requirements
• Onboarding and training

Employee Contracts

Your goal with employee contracts should be to eliminate any lack of clarity. Your employee contracts should clearly communicate things such as:

• Job title and responsibilities
• Salary
• Benefits
• PTO and sick days
• Termination details
• Discrimination policies
• Sexual harassment policy
• Confidentiality agreements

Payroll and Benefits

You need to effectively manage payroll and identify the benefits package you offer to employees.

You can use software to run payroll more efficiently — such as Emplova’s payroll processing solution.

When it comes to your benefits package, you can use a professional employer organization (PEO) that gives you competitive rates and can serve as one point of contact for all vendors. This route makes it more feasible for you — both from a cost and resourcing perspective — to offer a benefits package that helps you compete with the larger companies for attracting talent.

Check out Emplova’s benefits package for a good example of what you can expect to get from a PEO and learn about some of the other advantages of a PEO.

Employee Handbook

We strongly recommend creating a handbook. But there’s a catch.

You have to keep it updated. An outdated employee handbook is just as bad — if not worse — than having no handbook at all.

So when you create your employee handbook, you need to make a plan for how you’re going to keep it updated. It should include all of your company policies and processes as well as your expectations for employee conduct.

HR Compliance and Legal Requirements

It’s not fun, and it can be a nightmare to keep up with, but you have to ensure you’re following all the relevant laws and regulations for employment.

While it may be the last thing you want to spend time on, keeping up with HR compliance requires a lot less time than dealing with a potential legal issue. The best place to start is by doing a compliance quick check to identify any major gaps.

There are also several HR compliance resources and solutions available to help you navigate through the tangled web of compliance.

Another solution is to partner with a PEO, like Emplova. PEOs can help handle the heavy lifting of compliance so you can avoid the headaches that take your focus off of growing the business.

Onboarding and Training

We’re including this in the “must-haves” list, but we’re not suggesting that you need to have the perfect onboarding and training process from the get-go.

The important thing is just to have something useful in place as a starting point that you can improve on and optimize over time. The onboarding experience should introduce new employees to your company culture and your values as an organization. It should also provide any relevant training required for a new employee to be successful.

Remember that this doesn’t have to be perfect. Your onboarding and training will improve over time, but you need something in place so that new employees aren’t sitting around and wondering what to do on day one.

HR “Nice-to-Haves” That You Should Plan For

These aren’t necessary right away, but they are things you should plan for to stay competitive in the recruiting landscape and improve your employee retention rate. These include:

• Employee engagement programs
• Performance reviews
• Recruiting strategy

Employee Engagement Programs

From team-building events to wellness programs, these programs will play a critical role in shaping your culture.

Performance Reviews

When you’re small and scrappy, you might be able to get away with providing feedback organically. But as you scale and grow, you’ll need a formal performance review process to ensure you’re helping each employee get the attention and coaching they need to thrive.

Recruiting Strategy

As you continue to grow and need more talent on your team, it’s time to think more critically about your recruiting strategy.

You need to know what kind of candidates you want to hire, how you’ll position yourself as an employer in the market, and what tactics you’ll use to attract talent.

You Won’t Be Perfect, But You Can’t Be Sloppy

When you’re still a startup, there’s not much you’ll do perfectly.

It’s all a learning process, and the most successful founders and entrepreneurs are the ones who quickly learn from their failures and don’t hesitate to implement what they’ve learned into their businesses.

This also applies to HR, but when it comes to the “must-haves”, you can’t be sloppy. You can’t simply slap something together and hope for the best.

Remember, you’re an employer. Your employees have put their trust in you and your business to provide an income and be an important part of their career trajectory.

Take the time to be diligent. You’re not going to be able to spend a lot of time on it, so the time you do have should be used effectively.

By embracing your role as an employer and discerning between the “must-haves” and “nice-to-haves,” you now know where to focus your efforts and how to implement a successful HR program as you navigate your journey as a startup founder.

Emplova is a boutique Professional Employer Organization (PEO) that helps small to medium sized businesses grow and prosper by providing benefits, payroll, technology, compliance, and HR administration paired with concierge-style service and support. To learn how we can create a winning HR strategy for your business contact us today.

*Information in this overview is general in nature and not intended to replace legal advice in any particular manner.