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Basic Human Resources (HR)

Hiring. Salary Payment. Retain Talent. Termination

Human Resource (HR) management is a vital component of any business, regardless of its size. In a startup environment, the main differences often lie in the scale of the HR team and the way HR operations are structured to align with the company’s dynamic needs. While large corporations may have dedicated departments for each HR function, startups typically adopt a leaner, more flexible approach.

Despite these differences, the fundamental HR responsibilities remain critical for business success. In a startup, the four key HR functions typically include:

FLEXIBLE STAFFING	DESCRIPTIONS
Regular Employment	Regular employment consists of continuous predictable, and scheduled employment of 6 months duration or longer. Regular employment may be full time or part-time.
Full-Time or Part-Time	Full-time employment consists of a regular schedule of 37.5 hours per week. Part-time employment consists of a regular schedule of less than 37.5 hours per week.
Independent Contractors	Perform specific services on a contract basis used in a number of areas, including building maintenance,security, and adverstising/public relations.
Professional Employer Organisations and Employee Leasing	An employer signs an agreement with an employee leasing company, after which the existing staff is hired by the leasing firm and leased back to the company. For a fee, a small business owner turns his or her staff over to the leasing company,which then writes the paychecks,pays the taxes,prepares and implements HR policies,and keeps all the required records.
Temporary Workers	This is based on “try before you buy” approach. Employers who use temporary employees can hire their own temporary staff or use agencies supplying temporary workers. Such firms supply workers on a rate-per-day or per-week basis.
Seasonal Employees	Seasonal employees are hired to work on a part-time basis by companies that need extra help during a particular season, typically during the festive seasons.

FLEXIBLE STAFFING	DESCRIPTIONS
Regular Employment	Regular employment consists of continuous predictable, and scheduled employment of 6 months duration or longer. Regular employment may be full time or part-time.
Full-Time or Part-Time	Full-time employment consists of a regular schedule of 37.5 hours per week. Part-time employment consists of a regular schedule of less than 37.5 hours per week.
Independent Contractors	Perform specific services on a contract basis used in a number of areas, including building maintenance,security, and adverstising/public relations.
Professional Employer Organisations and Employee Leasing	An employer signs an agreement with an employee leasing company, after which the existing staff is hired by the leasing firm and leased back to the company. For a fee, a small business owner turns his or her staff over to the leasing company,which then writes the paychecks,pays the taxes,prepares and implements HR policies,and keeps all the required records.
Temporary Workers	This is based on “try before you buy” approach. Employers who use temporary employees can hire their own temporary staff or use agencies supplying temporary workers. Such firms supply workers on a rate-per-day or per-week basis.
Seasonal Employees	Seasonal employees are hired to work on a part-time basis by companies that need extra help during a particular season, typically during the festive seasons.

III. Retain The Right Talent

Retaining talent at the startup stage is tough as you can’t afford large salaries or benefits packages. How do you compete with companies who can?

The most important factor is ensuring that you are paying a fair wage with basic benefits like a retirement savings plan and health insurance. On top of that, it’s good to know that many employees, especially the younger generation, are willing to sacrifice a higher salary for more flexible working conditions, such as:

• Flexible working hours
• Work-from-home options
• Unlimited vacation time
• Opportunities for professional development
• A strong company culture and sense of community

One of the cheapest ways to retain talent is to take the time to praise your employees when they do their jobs well. Recognition and appreciation go a long way in making employees feel valued and motivated. Remember, for a startup, the decision to hire someone new is more costly than retaining a trained employee.

Retaining talent also requires consistent performance reviews. The new employee would have gone through some training to acquire job-related knowledge, skills, and other competencies. The company needs to assess their performance to determine whether or not he or she has been a successful hire. Regular performance appraisals provide employees with feedback on their work, identify areas for improvement, and recognize their achievements. For startups, performance appraisal can be simple and straightforward with a few predefined characteristics, such as:

• Goal setting and tracking
• Regular feedback and coaching
• Clear performance expectations
• Recognition and rewards for high performance
• Addressing performance issues promptly and constructively

Overall, retaining talent in a startup requires a multi-faceted approach that includes competitive compensation and benefits, flexible working conditions, a positive and supportive work environment, and regular performance feedback. By focusing on these key areas, startups can create a workplace where employees feel valued, motivated, and committed to the company’s success.

IV. Managing Employee Termination

Employee departures from the company, either voluntarily or involuntarily, are inevitable.  Regardless of the circumstances, it’s essential to manage terminations professionally and in compliance with legal requirements and company policies. The three primary types of termination are:

• Termination initiated by the employer (dismissal): This occurs when the employer decides to end the employment relationship. Dismissals can be due to various reasons, such as poor performance, misconduct, redundancy, or restructuring. It’s crucial to follow due process, provide appropriate notice (if applicable), and document the reasons for dismissal to minimize legal risks.
• Termination initiated by the employee (resignation): This occurs when the employee voluntarily decides to leave the company. While resignations are generally less complex than dismissals, it’s still important to manage them effectively. This includes conducting exit interviews to gather feedback, ensuring a smooth handover of responsibilities, and maintaining positive relationships with departing employees.
• Automatic termination: This occurs when the employment contract automatically ends due to specific circumstances, such as the completion of a fixed-term contract or the reaching of a mandatory retirement age. In these cases, it’s essential to communicate the termination date clearly and ensure that all contractual obligations are fulfilled.

Key Considerations for Managing Employee Terminations

• Legal Compliance: Ensure that all termination procedures comply with relevant employment laws and regulations, including those related to notice periods, severance pay, and discrimination.
• Documentation: Maintain accurate and complete records of all termination-related documents, including termination letters, performance reviews, and disciplinary actions.
• Communication: Communicate termination decisions clearly and respectfully, providing reasons (if appropriate) and offering support to departing employees.
• Confidentiality: Handle termination information with sensitivity and confidentiality, respecting the privacy of both the company and the employee.
• Transition Planning: Develop a transition plan to ensure a smooth handover of responsibilities and minimize disruption to the business.
• Exit Interviews: Conduct exit interviews to gather feedback from departing employees, identify areas for improvement, and maintain positive relationships.

By managing employee terminations effectively, companies can protect themselves from legal risks, maintain a positive workplace culture, and ensure a smooth transition for both the departing employee and the organization.

Make an appointment with Company Secretary or Our Lawyer for advice and consultation