4 Ways Startups can use Fractional Human Resources
Founders of startups focus their time on product development and talking to users. Hiring new employees and building the infrastructure of the business is a significant investment, but there are solutions to keep costs manageable. Leveraging vendors, contractors, and part-time, fractional professionals can help your business grow.
Hiring a Fractional Human Resources Director is one area where you can use flexible expertise to help grow your business. The average salary for a full-time Human Resources Director working five days a week is $166,762. What if you don't need someone in that role full-time? A Fractional Human Resources Director can work 1 or 2 days a week at a fraction of the cost of a full-time director so you can get the right expertise without the commitment and expense of a full-time employee.
The #1 reason business owners leverage Fractional HR is to give them peace of mind. By having an HR expert oversee the company’s people practices business owners can focus on growing the company while being confident the company is appropriately managing risk and compliance.
Here are four ways a Fractional HR Director can help you build a team and put basic HR practices in place to help you scale your business and eliminate risk down the road.
1. Develop a Hiring Strategy to Scale the Business
The Human Resources Director can develop a short-term and long-term hiring plan that aligns with the company's projected growth. This includes organizational charts, salary budgets, job descriptions, developing a candidate pipeline, making offers, and onboarding.
2. Establish Compensation, Benefits and Payroll
Compensation and employee benefits are a big overhead expense for startups. New businesses don't have to offer full employee benefits from day one, although it is something that can differentiate you from competitive job offers. The company should set a compensation philosophy for the direction of how the company compensates its employees. Does the company have an appetite to pay competitive to the market, lead the market or lag the market? Does the company want to offer startup equity instead of a large salary so employees have a stake in the business and are incented to help to grow the company's value? As for payroll, keep it simple. Hire a payroll processing vendor that you can rely on such as Paychex or ADP.
3. Write a Company handbook
Developing a company handbook puts your company's policies and procedures on paper. It gives employees details on sick leave, paid time off, parental leave, and other state and federally mandated laws.
4. Terminations
People will leave your company, whether voluntary or involuntary. It is important to have a process in place to ensure the employee that is leaving receives their final paycheck, company equipment is returned and intellectual property is protected. A separation agreement outlines the conditions of the termination and may include a separation payout. Legal counsel can give guidance on developing a separation agreement but your Human Resources Director is accountable for ensuring you and the employee are protected.
People Architects primary customers are growing startups and we can help start building your HR team.
To learn how Fractional HR can help your business contact us here
