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Eight HR pitfalls to avoid as a founder

There is a lot to consider when you’re getting started in business, but if you’re looking to employ people, there are some common pitfalls you would be wise to avoid. We set out a brief guide below on what can cause problems for your business where HR is concerned, and tips on how these pitfalls can be avoided. 

Lack of clear hiring strategy

If you can use accurate business forecasts to look a step ahead in terms of who you will need to recruit and what role they will be fulfilling, this will best prepare you when creating a successful hiring strategy. If you’re unable to decide what you need a new member of staff to achieve and how they will fit with the culture of your business and the rest of your team, you are less likely to hire the right person for the job. It is critical that as part of your hiring strategy you look not only at the skills and qualifications of the candidate, but also whether the individual will work well with your team, are committed and preferably have experience of working in a start-up setting. To save time and costs having to re-hire if you make a mistake, do not rush the selection process, ensure your interview questions are well thought-through and relevant and the job description for the role you are hiring for is thorough and specific. This will allow you and the candidate to better assess if the role is a correct fit for that individual. 

Poorly drafted employment documents and processes

When start-ups are growing fast and dealing with employment records and documents for the first time, it is difficult to stay on top of the administrative side of things. So far as possible, if you’re going to hire people, being forearmed with a system for HR and template documents is advisable. If you require assistance with drafting or updating HR start-up documentation, our employment solicitors can help. Making sure you have the correct systems in place is not only important in respect of being clear on the terms of employment and to be able to deal with grievances and disciplinaries effectively, but the GDPR means that keeping track of your employees’ personal data and how it is processed is also important. ;If you would like more information on GDPR and your obligations, see our article Your business guide to GDPR compliance

Lack of onboarding

As part of drafting out your recruitment process, when considering the candidate you’re hiring and their function in your business, you should also carefully consider the induction they will receive when they start. Instead of staff just being provided with the equipment they need to perform their role, you should also consider how to introduce the new staff to the rest of the team and integrate them quickly and comfortably into the culture of your business. If staff feel welcome and comfortable, are inducted with well-thought through and specific training, and are given clear objectives and targets, they are more likely to be more productive and happier in their role, making high turnover of staff for your business less likely. 

Poor communication

Communication is vital to maintain relationships at work and to be fully informed of what different staff members are doing and when. For start-ups there can be the added challenge, as these enterprises hire mostly remote workers, and so exchanging information can be more difficult unless clear structures and communication software are in place.  

Some of the most common reasons for start-up failures are lack of financial support, economic issues and misinterpretation of customer need. Whilst on the surface these things appear to be just about money, the reality is that poor communication across your team, with customers and to investors about the agenda and vision you have for the business will not inspire them to support your business and that could lead to start-up failure. 

To avoid this and ensure that good communication exists in your business, it sounds simple but really try to make a conscious effort to do the following: 

  • Listen to your team – make time to discuss one on one and as a group any concerns or questions and ensure that staff welfare is looked after. If one of your team has questions about your business, investors or customers may also be unsure on these points and addressing them sooner rather than later could be of significant benefit to your business. Further, if your staff feel that they are listened to then they’re more likely to be motivated, more engaged and more productive, all of which are positive outcomes for your business.   
  • Regular meetings – particularly if your team is working remotely, it is important to ensure that they all know the function of the other team members and can easily contact and communicate with them. Team meetings via video calls, are likely to make staff feel like they’re part of a team, so work more cohesively as a unit and not feel isolated or that they do not have support, if they need it. Creating regular opportunity for staff to provide honest feedback is beneficial to your business and is worth the time spent. Similarly, supervision and feedback on a one on one basis can be held regularly with managers, by video call, to ensure quality of work remains high and that staff feel supported and able to effectively perform their roles.  
  • Communication software- being able to organise conversations relating to different topics or projects in your business and looping in relevant personnel to the relevant work can be a huge benefit. It means the team can be updated on what’s happening in real time and can contribute to a particular conversation whilst still being able to continue their work. This can be particularly helpful where several people are working on the same project and somebody hits a snag, enabling the team to work together to troubleshoot, or equally to communicate any successes so that they can be replicated across the team and in future projects. This type of software can also be used to share documents and comment on them quickly by all member of the team. 

If you can combine all of the above, your start-up should see improved cohesion, stability, productivity and progression. This illustrates that communication is often underestimated by many start-ups when it really should be a priority.    

Lack of investment in training and employee development

Investment includes time as well as financial investment. Whilst spending money on training courses for staff might be part of the investment, if you can dedicate time to finding out how your staff want to progress and enable that growth and development to happen, you’re more likely to retain your workforce and not lose them to a competitor. An employee who is engaged, challenged and feels that time is being spent on their development and receives communication about suitable development opportunities is more likely to be highly motivated and loyal. This in turn benefits your business with better productivity and reduces the probability of having to spend more time and money recruiting for this role in the future. 

If you can provide new hires with the tools they need to start being productive as soon as possible and current employees with opportunities to enhance their abilities and experiences, you are doing everything you can to ensure employees at all stages of their time with your business are performing as well as they can be. 

Failing to train new managers

Whilst it is positive to give staff members leadership responsibilities, training managers to ensure they are well equipped to perform the role is advisable. It might be helpful to ask yourself: does the new manager understand their new role and your expectations for their performance?; have you defined and communicated to the new manager how their role will change from employee to manager?; and is the new manager able to recognize when an employee needs additional resources or support? It may be that an employee is struggling with stress relating to their personal life and managers should know what resources are available and how to signpost employees to relevant support for these issues as well as purely work matters, to get the best from their team. 

Particularly with managers it is not just being able to perform the role at the level expected, it is critical that the manager knows how you expect them to manage and deal with other members of the team and to support them, where required. Managers should be fully trained in all your policies and should understand your company’s grievance and disciplinary procedures and any equality policies your business has. If you would like further guidance on how to draft clear HR policies for your business, our specialist employment lawyers can assist with this.  

Neglecting company culture

The high pressure and juggling of multiple roles involved in the first few months of start-ups generally means there is a fluid work culture and building the product and raising funds take centre stage, without a clear company style or culture being given much thought. However, establishing a clear culture early on can help you keep your messaging and product consistent as you grow. This means that there is a blueprint for important issues at the heart of your business such as:  

  • how your organisation operates 
  • how the teams interact 
  • how the organisation communicates 
  • who the organisation recognises and rewards 
  • what the organisation believes in 

This can all be hard to change, so unless the founders lead from the front at an early stage an insecure, distrustful and even toxic culture could evolve, which will not attract or retain the top talent and will not motivate the team, all of which would have a negative impact on business.  

As the start-up environment is highly competitive, a great company culture can help differentiate your business from that of your competitors in the eyes of investors, customers and potential talent. To maximise the benefit, you should start early, hire the right talent to fit your company culture and the best strengths and hold the same core values as your founders, and the founders should set down key values and lead by example to ensure that the culture fits with the company’s mission and is consistently followed.  

Wrong performance metrics

Deciding exactly what is acceptable in terms of performance in every role in your organisation should be clearly communicated to everyone. If the expectations are clear and there is the opportunity through clear and open communication to clarify any confusion or ask for necessary support, this should assist in reducing sub-standard performance. When performance problems do arise, there should be a clear performance management process, ideally starting on an informal basis with clear but sensitive and constructive feedback at regular intervals, to give employees an opportunity to correct the issue. If this does not solve the problem and the performance management process continues, you may wish to receive bespoke advice from an expert solicitor, as to how you best deal with this in the specific circumstances.

About our expert

Sally Gwilliam

Sally Gwilliam

Employment Partner
Sally joined the employment team in August 2021 as a senior employment solicitor and became a partner in October 2023. Sally qualified in 2004 at international law firm DLA Piper, and worked there for a further 11 years. There she gained excellent skills and experience in employment law working for medium and large businesses across multiple jurisdictions and on complex legal and strategic issues. Since 2015, Sally has worked for two smaller legal businesses where her client base changed to SMEs giving her a fantastic understanding of the differing needs and priorities of any size of business and in a wide range of sectors.

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