Small business advice: Should you ditch your human resources department?


Hitchcock says employers should remember they are managing not so much a business, but an organic, ever-changing lifeform. (David Goldman/AP)
December 11, 2013

There is a lot of talk within entrepreneurial circles about the importance of releasing a minimum viable product, raising funds, iterating, and so on. But what you hear little about — and this can be the difference between simply building a cool product and running a multimillion-dollar company — is the importance of building your team and managing the messiness of people.

The latest and greatest technology is still built, marketed and sold by people. To succeed, we have to remember a time-tested fact: The best way to manage growth is to grow with the right people. You’re not managing a small business; you’re managing an organic life form.

When you start a company, you feel like you know it better than you know yourself. That is a great advantage when no one else believes in it. But that company will evolve, and as an executive, you have to evolve with it.

In the beginning, you are managing a company (the products, the pricing, the finances, the marketing) but soon enough, you’ll be managing that company’s growth.

For me, this was a dramatic shift. Suddenly, I realized that my mission and functions evolved. As we expaned, I had less responsibility but more authority. I had to ask myself: Can I live with that, especially if it wasn’t quite what I wanted?

It is a big change to step away from every minor decision and focus more on hiring the right people to make those minor decisions for you. And hiring the right people isn’t enough. In a competitive job market, you have to be able to retain them, too.

Here are a couple lessons to keep in mind as your firm undergoes that evolution.

Do away with HR and build a talent team

I once talked with a college student who was looking to get into the human resources field. She chose HR because she wanted to have an impact on her future company’s culture, but said she was nervous because no one “likes” HR.

I was taken aback, but maybe that’s naive. Everyone at our company loves our talent team, which provides our benefits, internal opportunities and employee events. But then again, if you work in a company in which people are always getting fired or reprimanded, HR may not be the most popular department.

I don’t like human resources because employees aren’t assets to manage. We don’t own talent, we only lease it. What if, instead of worrying about how to replace or discipline people, you worried about how to keep the amazing employees you have?

It’s possible. To start, stop filing all employee-related issues under HR. Figuring out how to keep great people is a talent management issue, not a human resources issue, so transform your HR department into a talent team and give the necessary authority and your managers. Train them to be effective employee and employer ambassadors.

Their primary role should be to find the best possible employees for the job, and then ensure they have clear opportunities for career growth within your company.

If you can do that, then your company will continue changing – for the better.

Promote change from within (and do away with non-competes)

If my job responsibilities as CEO have changed over the years, don’t you think that also happens within the Engineering and Client Services teams? These new responsibilities may not be precisely what an employee signed up for. Or they may have outgrown their role (after all, hiring ambitious people is the goal).

For most of our workers, the only mechanism that influences management is job mobility — which is one of the reasons that the tech industry would be well-served by doing away with non-compete clauses. It raises the bar for management and challenges them to stop looking at a piece of paper as the only way to retain employees.

And as an executive, it will force you to ask: Why does someone need to leave my company to find what they’re looking for?

That is why we try to be good about internal transfers. Since we pride ourselves on our culture, finding a cultural match in an employee is a big win. So it follows that someone who has worked at our firm for two years in engineering might be a better fit in marketing then someone from the outside, as they already know the culture. Why not give them the chance to interview?

Of course, this can only happen if you and your employees are willing to have frank conversations about the future. Many employees are too afraid of losing their job to talk about the job they really want — you’re going to have to ask them.

Jeremy Hitchcock is the CEO of Dyn, an Internet performance company, and a member of the Young Entrepreneur Council (YEC), an organization comprised of promising young entrepreneurs.

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