As a closet entrepreneur with stifled dreams of establishing my own tech start-up or community enterprise, I was delighted to recently read the news that start-ups launched during the financial crisis are more profitable than firms founded during times of plenty (https://www.telegraph.co.uk/finance/businessclub/sales/11068457/Recession-start-ups-are-more-profitable.html). Encouraging news indeed! Better still, the majority of the recession start-ups (56%) were launched by women, and that it is young people – not the old and experienced – who are more likely to launch a company during tough-times. Great stuff, I thought: victories for two marginalised groups in the workforce – success probably coming as a result of this marginalisation. Typical of entrepreneurial ethos, the underdogs are gaining an upper hand. There is hope for me yet!

From an employment perspective, I know from experience how critical it is for these new and growing companies to incorporate HR management practices into their development plans. It’s such a critical inclusion, but often overlooked by many entrepreneurs who see it as technical and legal drudgery at a time when they are focusing all their efforts on more exciting market-facing activities.

Yet look at the facts set out in the article: many of these start-ups hired staff in the past year, and they are equally determined about the future, with 17% looking to hire within the next year, compared to just 13% of older businesses. There’s growth on the agenda, in many ways, and it is exciting. New companies are often vibrant places to work, full of activity, optimism and leaders who inspire through clarity of vision and action.

Unfortunately, it is these same leaders who, in the rush of excitement to push their business, often lack the time to supervise and instruct a team of employees and any new starters. So what next – training? Yeah, training can compensate for a lack of one-to-one mentoring from leaders, especially in a frenetic environment where new starters are often parachuted into positions and expected to quickly pick up the pace. But therein lies another problem with start-ups – training is often weak and poorly organised. Things are now beginning to turn in on itself, with leaders rounding on employees who they claim are not pulling their weight and living up to expectation. Entrepreneurs often expect too much of employees and are unable to understand why they don’t show the same level of commitment they demonstrate. At the same time, the entrepreneur refuses to let go and delegate or devolve power to others. This is their company and they always know what’s best for it, like Ahab chasing the great white whale.

They are fixated, persuasive; they deliver, beguile, charm and demand. But above all, they are optimistic, and this is exactly why entrepreneurs should be loved by all. I mean it: if you see one today, go give him or her a hug. This optimism is vital for a healthy workplace and society. It gives meaning to action. Yet in never standing still it means other important aspects of running a business are often neglected, such as health and safety regulation, payroll management, and other fundamental, but less appealing legal requirements when it comes to employment law.

Enterprise is vital for getting a new business up and running. Yet once it is established, thought should be turned to embedding HR responsibilities into the company’s development strategy and day-to-day activities. Without HR plans and knowledge of employment law, new rising companies could be setting themselves up for a big fall. Organisation, coherency, consistency and employee engagement should be critical objectives. Good HR should be the foundations of all businesses – new and old – if growth is to be achieved.

Do entrepreneurs understand HR?

As a closet entrepreneur with stifled dreams of establishing my own tech start-up or community enterprise, I was delighted to recently read the news that start-ups launched during the financial crisis are more profitable than firms founded during times of plenty (https://www.telegraph.co.uk/finance/businessclub/sales/11068457/Recession-start-ups-are-more-profitable.html). Encouraging news indeed! Better still, the majority of the recession start-ups (56%) were launched by women, and that it is young people – not the old and experienced – who are more likely to launch a company during tough-times. Great stuff, I thought: victories for two marginalised groups in the workforce – success probably coming as a result of this marginalisation. Typical of entrepreneurial ethos, the underdogs are gaining an upper hand. There is hope for me yet!

From an employment perspective, I know from experience how critical it is for these new and growing companies to incorporate HR management practices into their development plans. It’s such a critical inclusion, but often overlooked by many entrepreneurs who see it as technical and legal drudgery at a time when they are focusing all their efforts on more exciting market-facing activities.

Yet look at the facts set out in the article: many of these start-ups hired staff in the past year, and they are equally determined about the future, with 17% looking to hire within the next year, compared to just 13% of older businesses. There’s growth on the agenda, in many ways, and it is exciting. New companies are often vibrant places to work, full of activity, optimism and leaders who inspire through clarity of vision and action.

Unfortunately, it is these same leaders who, in the rush of excitement to push their business, often lack the time to supervise and instruct a team of employees and any new starters. So what next – training? Yeah, training can compensate for a lack of one-to-one mentoring from leaders, especially in a frenetic environment where new starters are often parachuted into positions and expected to quickly pick up the pace. But therein lies another problem with start-ups – training is often weak and poorly organised. Things are now beginning to turn in on itself, with leaders rounding on employees who they claim are not pulling their weight and living up to expectation. Entrepreneurs often expect too much of employees and are unable to understand why they don’t show the same level of commitment they demonstrate. At the same time, the entrepreneur refuses to let go and delegate or devolve power to others. This is their company and they always know what’s best for it, like Ahab chasing the great white whale.

They are fixated, persuasive; they deliver, beguile, charm and demand. But above all, they are optimistic, and this is exactly why entrepreneurs should be loved by all. I mean it: if you see one today, go give him or her a hug. This optimism is vital for a healthy workplace and society. It gives meaning to action. Yet in never standing still it means other important aspects of running a business are often neglected, such as health and safety regulation, payroll management, and other fundamental, but less appealing legal requirements when it comes to employment law.

Enterprise is vital for getting a new business up and running. Yet once it is established, thought should be turned to embedding HR responsibilities into the company’s development strategy and day-to-day activities. Without HR plans and knowledge of employment law, new rising companies could be setting themselves up for a big fall. Organisation, coherency, consistency and employee engagement should be critical objectives. Good HR should be the foundations of all businesses – new and old – if growth is to be achieved.

2017-12-19T16:58:46+00:00October 20th, 2014|