With a diverse ecosystem of Web3 and NFT-driven startups beginning to flourish across Canada, an old debate is being revived: just how important is HR for a newly formed company—and when should you make your first HR hire?
Some professionals believe HR should be part of every company’s founding team. But as a consultant focused on changing the way leaders perceive and use HR to build their businesses, I politely disagree. In fact, I’d suggest that with some effort, your Web3 company can likely do without regular HR support for some time.
Here are three of the top reasons why most companies think they need HR (when they really don’t) and what your startup should do instead.
1. There’s a lot of administrative work involved in growing and staffing a company.
This is very true. As your team grows, in fact, you may find yourself having to deal with a lot more than just ordering additional laptops. Typical administrative duties attached to hiring include everything from managing orientation, payroll, and benefits to ensuring policies are signed, and employee information is kept accurate and up to date.
Most founders shoulder the brunt of this workload themselves—until, that is, it becomes too time-consuming and they begin to think about hiring an HR person to take care of it for them.
But here’s the thing: tasks like these don’t actually need to be performed by HR people and are usually better handled by someone with an operations or administration background.
In other words, you’ll probably be better off hiring a highly skilled executive assistant—someone who can take any number of administrative burdens off your plate—and accessing one of today’s incredible, affordable HRIS (human resources information system) platforms to help automate these duties instead.
Not only will this free you to focus on other, more pressing aspects of growing your company, your EA will feel far more fulfilled in their role than the disgruntled HR specialist you would have tasked with handling routine administrative chores.
2. HR can be called on when employees are upset or unhappy.
This is a misconception I run across all the time. Many business owners and senior leaders think HR will be able to step in and help manage their employee relationships. But data from experts like Gallup makes it clear that employee engagement is driven first and foremost by a company’s managers.
For example, not only are employees who receive daily feedback from their manager 3X more likely to be engaged than those who receive it annually at most, 70% of the variance in team engagement is determined solely by the manager involved.
Even the most well-meaning HR department can’t fulfill an employee’s core needs, mitigate a founder’s behaviours, or serve as a substitute for poor management. And this point becomes especially relevant in a space like Web3.
If past emerging markets are anything to go by, the individuals most likely to take on the risk of starting a Web3-based company aren’t necessarily those with the most people-first personality traits. On top of that, there’s a tendency for new companies to hire senior leaders based strictly on their marketing expertise —rather than their proven ability to grow the marketing function and team.
One of the best ways to enable faster, more sustainable growth for your startup is to hire a senior leadership team that possesses both managerial talent and domain expertise.
Better still, you should aim to properly train all of your managers early on while making formal manager training a core part of your organization. That simple action alone could save you from needing HR assistance for years.
3. New companies need help with policy development
While I’m not the biggest proponent of managing by policy, most organizations—remote or otherwise—will need to adhere to certain legislative requirements depending on where the employees they hire are working from.
Many companies automatically turn to HR professionals to help draft their employment policies. But the better option in many cases is to work with an experienced employment lawyer from your own jurisdiction.
This can prove especially beneficial since, in addition to following employment legislation, your company would be well-advised to establish a clear set of workplace harassment policies and procedures right from the start.
Based on the many startups our team has worked with, this is one document you shouldn’t delay seeking legal help to develop.
The bottom line
Whether you’ve heard, or you simply assumed your Web3 startup needed full-on HR help from the get-go, it’s important to think carefully about your reasons for making such a hire.
Chances are that by investing in a solid administrator, management training, and legal assistance instead of HR, you can cover more ground, more efficiently during the early days, positioning your startup for optimal growth later on.