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HR plays a vital role in any organisation these days, be it big or small. Here’s why the role of HR is of utmost importance, even in a start-up
In the recent past, the role of HR has evolved drastically and now it plays a vital role in the running of any business, be it a huge corporate house or an entrepreneurial start-up. Setting up a new venture is no cakewalk and human resources is an essential ingredient for the success of start-ups, say experts. It is essential for an entrepreneur to have a good understanding on the different aspects of the HR function. If yours is a people’s business, then hiring the best talent becomes a huge channel and thus, setting up a good HR department, becomes the first priority.
HR – an indispensable function
So, how important is it for a start-up to have a proper HR department in place? Damien Marmion, CEO, Max Bupa points out, “In any industry, especially in the service sector, it is important to put in place a HR department first. Identifying the best talent as per organisation specific competencies is the key starting point for a strong and lasting organisation. A well-defined HR strategy is therefore, a roadmap and the route towards achieving a competitive advantage. Employee centricity is what drives a culture of customer centricity.”
According to Deepak Kaistha, managing partner, Planman HR, “HR is an essential ingredient for any organisation, big or small and is a must for the success of start-ups. For any start-up, clear defined policies and procedures are required to govern the workplace. It is vital that an entrepreneur has a good understanding of the different aspects of the HR function. Defining smart HR policies can make the organisation more efficient and save entrepreneurs from experiencing common small-business problems. Also, organisations that use best HR practices since the beginning, have higher productivity and a stronger market performance relative to their competitors.”
Laying the foundation
How should an entrepreneur set up an HR department in a start-up firm? What is the best approach? Rajesh Rai, director HR, Benetton India asserts that one should start small. “Start-ups usually have venture capital funding or sometimes they fund for themselves. Any start-up, therefore, needs to focus on controlling its overall manpower costs while at the same time, watching its retention and attrition levels. As a result, it’s important that all strategic HR processes and systems are simple, yet scalable enough to support growth in the long term.”
Raminder M Ghosh, head - business planning and control, Chimes Group further states, “The size of the HR team is not important as much as its intent. At a start-up stage, the HR department needs to be more engaging and interactive. The situations are very dynamic and hence, need to be responded quickly and effectively. HR is a support function for the organisation and they would fail to do their job if they don’t understand the business and the business environment.”
Roadblocks on the way
Though setting up a proper HR department is of utmost importance, there will be certain challenges on the way too. So, what kind of challenges do HR people face in setting up a proper HR department in a start-up firm? How can these challenges be overcome? Rai says, “Any start-up would require an HR resource that is technically sound and is able to manage various areas of human resources without, may be, specialising deeper into any one. That is a challenge. Correct fitment should be made while hiring HR resources for start-ups. Attrition is higher even in the HR field. Look for a holistic experience in the HR domain; go slightly deeper into compensation and talent management aspects. Further, HR issues require patience and dedication to solve. Ensure the person has this too in fair share.”
Hence, if taken care of properly and set up in the right manner, a good HR department will only lead to the infinite growth of the organisation and its employees, be it in a start-up firm or a big organisation.
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