What HR startups can teach us about people

Managing people is central to all business. Every aspect centres itself on what people need: customers’ expectations, staff’s payment, investors’ return on their investment and so on. Even within these there are categories to consider, especially when it comes to staff.  Many companies point out their success is often due to their focus on staff retention and loyalty – this leads to productivity and attractiveness for future, talented employees. In other words, because companies care about their staff, as businesses they benefit from improved work production. This means anyone can benefit from learning how to manage the people involved in their business. To that end, it’s worth considering just what new thinkers in the world of human resources can teach other businesses. With a recent boom in HR startups, there are lessons to draw from today.

The HR startup boom

Startup culture is, according to experts, primarily about delivering quickly, effectively and with an eye toward growth. At a talk, CEO of Twilio, articulated his view of what defines a company culture, particularly a startup company culture like his own.

“Culture is the collection, you’ve 130 people, out there making decisions every day. Thousands of decisions are made every day. Culture is how you as, say a leader of the company are confident that every one of those decisions is the right one. In an environment where you say “You know, people aren’t allowed to make decisions” Well, that obviously doesn’t work. You don’t [hire] great people and then say ‘You can’t make decisions.’”

As Wired notes, defining startup culture is difficult, yet will inevitably centre around the idea of growth and identity. In this sense, it’s important to consider why HR startups are becoming more popular. In India, for example, there is a rise in HR startups seeing enormous success. As Economic Times points out:

“A raft of ambitious ventures … are trying to breathe fresh life into the world of HR, once considered a dusty support function ridden with slow-to-move paperwork and saddled with outdated technology. While early ventures struggled to get the attention of customers and investors — primarily because it was considered difficult to monetise a business focused on squeezing revenues out of a support function — the tide is turning, as startups look to uproot old ways of doing business and shake up entrenched incumbents.”

The question should not be why are HR startups finding success but why other companies are reaching for them. This would go a long way to businesses reconsidering their approach to HR.

What HR startups have tapped into

As most HR management courses teach, focusing on people in a business means focusing on productivity. One HR expert pointed out, for example, that focusing on company culture can change everything for the better: “If you’re focused on culture, we encourage managers and HR teams to think about the ‘total employee experience’: everything from the coffee in the coffee machine to the quality of management plays a role.”

HR startups are tapping into this. They’re recognising the importance of data gathering, broad outlook and the ramifications of person-centred approaches to business. In turn, businesses are recruiting HR startups since it means hiring those who’ve attended advanced HR training courses. While it might be advantageous for, say, the CEO to consider taking human resource management courses part time, this might not be a viable option. Human resource management courses are beneficial, but many CEO’s would rather simply hire HR firms hence the recent boom in HR startups.

These startups are better placed due to working actively on data, in real-time, with modern technology. The problem is HR startups often have numerous obstacles, such as long-established HR firms already tapping into big business empires. Due to concern for growth, startups struggle to find investor support, since there is concern there won’t be a guaranteed return on investment – since many see no growth in HR startup culture. However, data suggests this is changing. Newer businesses recognise the need for proper HR management, thus choosing HR startups, which are themselves also new, to help.

As CBInsights highlights: “HR tech startups have seen considerable momentum, raising $2.4B in 2015… with funding and deal count reaching all-time highs.”

HR helps to remind businesses that qualifications aren’t sufficient or even necessary for the jobs. Numerous people can be trained to do a job, but fewer can fit into a company culture. This is often at the top of HR managers’ minds when considering recruitment and staff. As Forbes notes:

“Once culture is established and communicated, it becomes a tool to screen and assist candidates. The Talent Board (a research group that studies the job candidate experience) found that 41 percent of all candidates search for information about a company culture before they apply. So your culture is already a screening tool when you recruit people… When you focus on culture as strategy you find that some people just won’t fit, regardless of their pedigree.”

To that end, it’s important to consider what HR startups are tapping into and what they can teach and do fo businesses. In this way, businesses can’t afford to forget the people at the centre of their production, as well as the end. After all, businesses themselves benefit when the people are catered to, since that is what business is all about.

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