Building blocks for HR success: Set up a People function

Published on Mar 27, 2024

Building blocks for HR success: Set up a People function

Most founders dream about product and revenue, not HR. But as your business grows, the need to cover core HR or People functions increases exponentially. 

Nailing the foundations of HR will make your company an attractive place to work and avoid the need for costly corrections in the future. But as a founder, you probably have a lot more than HR on your plate. 

So what fundamentals should you have in place to ensure your company survives (and hopefully thrives) until you can hire your first People person?

We've put together this guide with a checklist and tips for building out the seven core people functions:

  • Recruitment
  • People operations
  • Performance management
  • Learning and development
  • Compensation and benefits
  • Workplace
  • Employee experience

Leadership fundamentals: 7 People function foundations

Which People functions you decide to focus on initially and how you sequence the build once you have People staff aren’t set in stone. Your People functions structure should support your specific needs and business objectives, so feel free to get creative. We'll continue to publish deep dives into strategies for each function, but here’s how to get started.

Checklist of the seven core people function fundamentals

Recruitment

Effective recruitment increases operational efficiency and innovation by bringing in people with fresh perspectives and the necessary skills to drive the company forward. In fact, Glassdoor found that a positive onboarding procedure may increase efficiency by 70% and new employee retention by 82%. The recruitment People function encompasses: 

  • Headcount and workforce planning
  • Talent selection
  • Employer branding
  • Tech enablement to streamline recruitment processes
  • Ensuring a positive candidate experience 

Recruitment’s power lies in the meticulous planning of organizational design, identifying gaps, and understanding the strengths and weaknesses of candidates to build a team set up for success. 

Another important aspect of the recruitment role is creating a robust employer brand that reflects your company’s core mission, values, and culture. In fact, a recent survey found that 69% of candidates are likely to apply to a job if the employer actively manages its brand, and 50% of candidates say they wouldn’t work for a company with a bad reputation—even for a pay increase. Most startups aren’t household names, and building the foundations of employer brand can help you stand out from the rest.

Employer brand tactics you should focus on:

  • Positioning and messaging: Just like your business marketing efforts, you’ll also need to articulate to your future hires what’s special about your company. Highlight what makes your company unique, focusing on culture, growth opportunities, and benefits.
  • Expert partnership: You don’t have to go it alone. Work with employer branding vendors for creative ways to showcase your company culture and values. These range from talent marketplaces to media companies that feature jobs for a larger audience.

Share the air: You probably already have a social media and blog presence for your business—dedicating 10% of your posts to your employer brand can go a long way.

Link to blog post "How to make a startup hiring plan"

‎People operations

Once candidates are successfully recruited, the people operations function ensures you’re ready for efficient integration of new hires, managing the employee lifecycle, and administering employee data. The goal here is to ensure a smooth and trust-building experience between you and your employees, effectively building trust and engagement, which lead to performance. 

This People function thrives on a culture of transparency, consistency, and open communication, which are key to employee retention and satisfaction. It involves:

  • Setting up an effective tech stack to facilitate employee experience
  • Developing policies and processes for compliance
  • Managing employee relations
  • Implementing systems that support career development and progression
  • Streamlining onboarding and offboarding processes 

Aligned with strategic decisions from the leadership team, People operations supports creating a work environment that increases employee performance, upholds the company’s values, and enables employees to develop and grow. 

Performance management

This function involves aligning employees’ efforts with the company’s strategic goals. It creates a framework for identifying high performers and developing leadership within the organization, including: 

  • Aligning individual and business objectives
  • Designing systems for continuous feedback and performance reviews
  • Leveraging data-driven insights to make informed decisions about talent management
  • Managing career progression 

Use performance management so each employee takes ownership of their work, removing the need for micromanagement. It also sets clear performance expectations in line with the organization’s goals, leading to increased productivity for the individual and the company.

Learning and development

Learning and development is a win-win for both employee and company. Identifying candidates with specific skill sets has become increasingly important. Regular and bespoke training programs that upskill existing employees reduce the need for additional hiring, and they enhance the productivity and versatility of your current workforce, as well as support your individual employees’ career goals.

This fundamental involves:

  • Facilitating compliance training
  • Development programs for managers and employees
  • Mentorship and on-the-job peer-learning opportunities
  • Executive team development 

Ensure individuals at all levels have personal and professional growth opportunities to make your company an attractive option for candidates and to increase the likelihood of retaining your staff.

Compensation and benefits

Compensation and benefits are inherent to attracting and retaining talent, reflecting the company’s commitment to employee well-being. In fact, a recent survey found that 49% of employees will look for a new job in the next 12 months because of confusion or dissatisfaction with benefits.

This fundamental involves:

  • Developing cash and equity compensation strategies
  • Designing benefits and perks that meet employees’ needs
  • Regularly reviewing and adjusting these offerings to remain competitive
  • Ensuring these offerings are aligned with market standards

Establish clear and scalable eligibility criteria for compensation, benefits, and perks. This People function aims to ensure that your startup can reach financial objectives, but that you can also grow, retain, and motivate your team. We like to think of it as, what’s the strategy you can deploy that optimizes for talent attraction, business sustainability, and internal equity?

Workplace

According to Gallup, 51% of currently employed workers say they’re watching for or actively seeking a new job, so the Workplace fundamental—creating a harmonious environment that supports collaboration, creativity, and well-being—can’t be understated.

This fundamental involves: 

  • Providing a safe workspace in compliance with OSHA and other laws in your area
  • Designing a workplace strategy and its resulting operational practices: defining whether it should be remote, in-person, or hybrid and how that aligns with broader company goals
  • Contracting vendors or other external entities to provide the goods and services your workplace needs to be successful

Provide innovative benefits like flexible working arrangements and wellness programs to enhance employee satisfaction and work-life balance. It will help retain the top talent that can make your startup a success.

The WFH FAQ: SignalFire’s Remote Hiring Guide For Startups

‎Employee experience

This People fundamental captures the essence of the employee journey within the company and ensures that each individual is recognized for their contributions in a positive, supportive environment. 

This fundamental includes:

Provide a positive employee experience, which is great for not only morale but also for profitability. A recent study found that highly engaged teams show 23% greater profitability and disengaged employees cost U.S. companies up to $550 billion a year.

Want to dive deeper into building out the People function?

Download the People Fundamentals and Foundations Template Here

How SignalFire helps companies build stellar People foundations 

Initiating the development of your startup’s People structure and aligning the People function’s priorities with the business’ vision and company goals is the first step in building a team that can drive the business forward.

At SignalFire, we support your journey with our advanced recruitment tools, People Mastery series, and a seasoned in-house team ready to assist. With industry veterans like Tawni Cranz, the architect behind the Netflix Culture Handbook, we offer proven expertise in hiring strategies, shaping culture, and optimizing the employee experience. 

Don't want to handle this all by yourself? SignalFire can support you with our proprietary AI engine, Beacon AI, which allows you to draw from a pool of 600 million employees and 80 million companies. Use it to hire the world’s top engineers, data scientists, product managers, designers, and business leaders with ease. 

Contact us if you’d like to know more about how SignalFire can help build your team.

*Portfolio company founders listed above have not received any compensation for this feedback and did not invest in a SignalFire fund. Please refer to our disclosures page for additional disclosures.

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