5 Hidden HR Risks for Biz Start-Ups

 “Our first calls for HR Advisory or Talent search are often prompted by growth or crisis,” reports Belinda Morris, President & Founder, Peoplescape Consulting Group.

Start-up entrepreneurs are typically focused on the products and services they are excited about bringing to market, operating on the belief that great ideas are the foundation to a successful business. Real entrepreneurs are rarely deterred by grim statistics, such as Dunn and Bradstreet’s reporting that 3 out of every 4 start-ups fails in the first two years.

While much has changed in the U.S. economy over the last five years, what has not changed much for very small businesses, is that most start-ups are still family owned, privately financed, predominantly sole proprietorships or sub chapter S corps, and have only a few employees in their early years. What has not changed over the last five years is the mindset and the character of an entrepreneur. The hard-charging, optimistic, risk taker, innovator, and challenger with grit and spirit still applies and continues to sustain the U.S. economy.

At Peoplescape we work closely with entrepreneurs in advertising, pharma, tech, hospitality, on-line retailers, non-profits, professional services, developers, and more. “Our first calls are often prompted by growth or crisis,” reports Belinda Morris, Peoplesape’s founder, “when business owners recognize that there are business, financial and legal risks if they do not tend to the people in their organization with the same level of enthusiasm as their core business venture.”

Entrepreneurs also share two characteristics deep in their DNA that can be intense drivers as well as obstacles to their direct management of people. Those traits are optimism and tenacity – two essential ingredients supporting the drive to accomplish one’s business dreams. Under stress however, even seasoned entrepreneurs can feel the effects of the “flip side” of these strong tendencies, leading them to negativity (opposite of optimism) and disengagement (opposite of tenacity) in all things people and business-related.

Successful entrepreneurs have an instinct to surround themselves with a knowledgeable team of experts. A Talent (HR) professional is one of those key experts to bring to the table as soon as it is feasible and arranging access to interim HR advice is an option until in-house solutions are developed. While talent search and daily operations are typically the cornerstone of HR in start-ups, relieving the owners of “people distractions” is a high-value role, along with the task of building the infrastructure for HR practices to lay the foundation of company culture.

Five hidden “people” risks start-up entrepreneurs should take notice of:

  • Too few or too many staff.
  • Rapid turnover, rehiring, and retraining.
  • Brand or customer damage from poorly trained staff.
  • Workers comp claims resulting from lax safety training.
  • Profit leaks due to lack of accountability and lack of workplace policies and procedures.

Contact Us for information on our recruitment, outsourcing, and manager training for start-ups.