Start-ups struggle to fix HR policies

HR experts say start-ups have always had an informal work culture. But with a growing work force, they are now struggling to put in place HR policies to ensure professionalism

For Niren Rai, founder of an education start-up, employees have been an extended family with whom you work hard and party hard. But of late, the attitude of the ‘family’ has been bothering Rai.

“I am finding it difficult to ask my colleagues to behave professionally. We go out often but now I see that the line between informal and formal attitude at work is blurring. It is impacting work; personal and professional equations,” says Rai whose venture has been funded by some marquee funds and talks are on to raise another round of funding to expand in other cities.

Human resources (HR) experts say start-ups have always had an informal work culture — be it the dress code, communication style and a flat organisational structure. But while that continues, quite a few start-ups have been growing in size much faster than what they had anticipated, requiring a larger work force.  “Fast growth is welcome but handling the human resources issues is proving to be quite unsettling for me,” says Rai, a graduate from the Indian Institute of Technology - Bombay. He has now roped in an HR consultant to counsel his colleagues on how to have a good time while not allowing that to affect work.

HR consultants say Rai is not alone and a host of his colleagues in other start-ups, too, are in a similar predicament. Naini Chandra (name changed) who after heading the HR department of a very successful start-up floated her own HR venture, says she is swamped with requests from start-ups to manage their human resources.

HR of a start-up or an innovative small and medium enterprise (SME) is different from that of a traditional firm as it involves dealing with the aspirations of very young people, a generation that does not believe in following protocols and wants a quick growth, consultants say.

Sameer Parwani, founder and CEO of Coupon Dunia, says working at a start-up means everyone is trying to build something together and when one begins to grow rapidly, there are bound to be challenges. “As a start-up, you are competing with the best of talents and old generation companies. We are always looking at what other companies are doing and keeping a tab on how we can measure up,” says Parwani.

What adds to the woes of a start-up is that many do not believe in having a full-fledged HR department. “In a dozen innovative SMEs that I have worked with, I have seen that HR function is considered an additional cost and never budgeted for. I advise them to have at least one or two people in their team to look at the function,” says a consultant, referring to the fact that some start-ups prefer to outsource HR than set up an HR team.  Madhur Ramani, co-founder and managing director at Stratum Consulting, says he has seen more entrepreneurs keeping themselves abreast with the latest HR trends and implementing the same. “As the organisation grows, it becomes a challenge for start-ups to scale up. They often seek consulting on internal communication, performance management and succession planning,” says Ramani.

Coupon Dunia’s Parwani says he reads books on HR to keep himself informed on the HR policies practised nationally and internationally.

“Young companies are close-knit but as they grow, personal touch vanishes and internal communication becomes difficult. So managing communication is required. Many start-ups have begun regular quarterly discussion on HR-related matters to address this challenge,” says Ramani.