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This article was published on April 29, 2016

3 disastrous HR mistakes your startup should avoid at all costs

3 disastrous HR mistakes your startup should avoid at all costs
Michael Gugel
Story by

Michael Gugel

Michael Gugel is the co-founder of GoCo automates benefits, payroll, compliance and HR for startups and small businesses. Michael Gugel is the co-founder of GoCo automates benefits, payroll, compliance and HR for startups and small businesses.

The first few years of any startup are generally characterized by long hours, cramped workspaces, shoestring budgets, and skeleton teams.

In a scene closely resembling a beehive, individuals and divisions scramble around each other, totally focused on their individual goals and deadlines.

In the early stages of a startup, apart from the occasional freelance developer or Dominos delivery guy, your workspace will be filled with familiar faces. And when your core team consists of seven people, human resources is probably as alien a concept as a 40 hour work week.

When you get your first funding round or your product really starts to sell, you are going to need to expand your team… and fast! However, waiting until the last minute to prepare for the influx of new team members will ultimately lead to slip-ups.

So what are the common HR mistakes which startups make when scaling, and how can you avoid them?

1. Waiting to hire at the last minute

interview, people, teamwork

According to Neil Patel, online marketing expert and Entrepreneur magazine contributor, finding the right moment to hire new staff can make the difference between a failed enterprise and a successful business.

Due to financial and logistical constraints, many startups focus too much on their immediate needs, only looking for new hires when they are already up against the wall and desperately needing more hands to take up the strain.

Leave hiring to the last minute and you risk missing critical market opportunities and being inundated with projects which you simply don’t have the resources to finish. When orders are filling your inbox, your website needs urgent improvement, and tensions are reaching boiling point, you may start to rationalize to yourself that maybe B-level talent is OK.

Don’t fall into that trap.

What should you do?

Rather than living in the moment, sit down with individual team heads and plan potential hires up to three months in advance.

Look at your process systematically and outline the pain points. Where are the bottlenecks and potential breaking points? How much breathing space will new hires offer? How long will it take them to ramp up?

Your ability to find talent is better than ever before. 20 years ago, you only had referrals and recruiters. Now, you have LinkedIn,, and a whole host of 2nd-degree connections you can tap into through social media.

According to a Jobvite survey, “employers who used social media to hire found a 49 percent improvement in candidate quality over candidates sourced only through traditional recruiting channels.”

Don’t accept any less than the best, and if push comes to shove, hire a specialist recruiter to send you pre-screened candidates.

2. Not having an organized onboarding system
order, organize

You spend a lot of time recruiting a candidate. You sell them the vision of your company and the valuable role they’ll be playing when they join. They’re excited for their first day and arrive bursting with energy and fresh new ideas. But the attention often stops after they accept the offer. When they enter the office on their first day, it’s like walking into a zoo.

People are running around like madmen or plugged into their laptops, tapping manically and looking unapproachable. Team heads are shouting to each other across the cramped open plan office space. They sit down at their desk (if they have one) and are given some rushed instructions about what they should be doing.

These are all of the necessary ingredients to make a potentially incredible new addition to the team feel like a bashful kid on the first day at school.

What should you do?

If you want to keep the momentum going and make sure they hit the ground running, you need to have all your ducks in a row from the second that a new employee walks through the door. Make sure that someone invites the newbie to lunch or for a coffee on the first day.

Little touches like this can make a huge difference. Making someone feel part of the team, and an important cog in a well-oiled machine improves engagement, productivity, and efficiency.

And make sure you take care of the obvious. When a new hire steps into the office, they should have a space to work and their devices should be ready to go. Surprisingly, sometimes this fails to happen.

But perhaps most importantly, new starts want to feel valued and useful. Make sure that someone is available to show them the ropes, explain how your internal systems work, and walk them through their day to day tasks to make sure there are no misunderstandings. Employees cost businesses an estimated $37 billion every year because they don’t fully understand their jobs, a lot of which comes back to poor training and onboarding processes.

3. Believing that no management is good management

michael scott, best boss, managment

While we may be living in a startup era of segways, office perks, open plan offices, and new-age management systems – effective worker engagement requires a lot more than a few cups of free organic coffee each day.

Many startup founders are so busy, they use it as a justification for not being effective managers. It’s true that you should hire people that are self-managed, but don’t take that too far. New hires should always have someone who they can approach when they have problems or doubts, and who will give them regular feedback on the work they are doing.

Mike Rickheim, VP of talent management at Newell Rubbermaid says:

When people have the tools they need to succeed, feel good about their personal growth opportunities and receive the appropriate rewards and recognition for their contributions, it’s a win-win proposition.

What should you do?

Communication is the cornerstone of effective management. Successes, challenges, and lessons learned should be openly and frequently discussed during one-on-ones. Start with frequent communication and everything else that will make you a good manager will start to fall into place.

When you look back over the last couple of years, it is probably hard to recognize the company that you are a part of today. While the core members will know how far you have advanced, and how much time and effort has been put into your product and service, you cannot expect new starts to see the bigger picture.

New employees only see what is placed in front of them when they join your company, so if you want to attract the best talent, and get them to really engage with and advance your company, then you need to have the basic HR systems in place to make them feel at home.