When should start-ups hire a Head of People?

Who to hire when is always a dilemma for start-up founders and the decision about when to hire your first Head of People is no exception. Indeed, it’s a topic that creates quite a lot of debate.

What everyone agrees on though, is that it’s a decision with far reaching (and often unintended) consequences.

So here’s our advice on some things founders should think about before hiring their first Head of People…

What do most other companies do?

You need to make the right decision for you and your company, but let’s be honest everyone likes to know what the crowd’s doing. So here’s our take on the ‘typical’ approach…

In the really old days (like 10 years ago) most start-ups ended up with a Head of People who’d grown into the role. Someone bright, personable and enthusiastic who’d joined when the team was small, in a junior/generalist type role and who’d expressed an interest in taking on responsibility for the People and Culture stuff. Some of these people turned out to be absolute super stars; but most of the time, by the time these companies hit 100 people, this person had either been sidelined or burnt-out and replaced by someone more experienced.

Unfortunately, lots of companies discovered that having an inexperienced People person who didn’t really know what they were doing ended up creating more problems than it solved. People practitioners started talking about ‘people debt’ and the negative cultural traits that can become entrenched in early stage start-ups.

Money Mike GIF by Rooster Teeth

As a result, start-ups started to take the People function more seriously. They discovered that getting the people stuff right early can really accelerate your growth. It can ensure you have the foundations for sustaining a healthy culture for the long term, and it’s much easier to build it right first time than to try and undo bad work further down the road.

Over the last few years, most start-ups seem to be recruiting a Head of People once they hit c50+ employees and are feeling confident about their growth. This is the point at which the admin burden of people management really starts to bite and when it’s clear that you can start to put in some structure and processes that make it easier for teams to be effective.

But there’s also now a camp of people that thinks the people stuff is so integral to a start-up's success that a People person should be one of your first 10 hires.

At The Pioneers, we think hiring a People person this early is usually a bad idea. If you bring in a Head of People too early, they’ll almost certainly end up getting in the way. Building too much structure too early, will slow you down and will compromise the flexibility you need to find Product/Market Fit.

There are two exceptions to this:

  1. If you’re going for hyper-growth . If your strategy is growth at all costs, then hire a great Head of People as soon as you can, you’re going to need them!
  2. If your founding team really don’t do people, but it’s integral to your business model. We all have our strengths and weaknesses and if you look across your founding team and all of you struggle to ‘do people’, then maybe prioritise bringing someone in early. But in these circumstances you really want a People person who’s more of a team coach, than someone who’s looking to build a People function.

So how do you go about deciding when’s the right time for you to hire your first People person?

1. Hire a Head of People when you’ve got Product/Market Fit, but not before

The number one rule of thumb: don’t hire a People person until you’ve got Product/Market Fit. Up to that point your investors are going to expect all your resources to be focused on development, sales and marketing. And until you’ve got traction and funding for growth, you don’t really know what type of organisation you’re looking to build.

Plus, we’d argue that before you find Product/Market Fit, it’s the external, not internal, factors that are really going to shape your culture and ways of working. To put it plainly… pre Product/Market Fit your culture needs to be malleable - you just need to do what it takes to succeed. Fancy People strategies, systems or principles aren’t that much help at this stage.

2. Hire a Head of People when the faff of people management is slowing your team down

There’s a certain amount of People management stuff that just needs to get done: onboarding new employees, contracts, immigration checks, payroll, holidays etc.

And there’s a lot of People stuff you can do that makes a real difference to people’s wellbeing and performance. Making sure people get good feedback and understand how they can best contribute. Making sure teams are aligned and collaborating effectively. Looking after people’s health and personal development.

You don’t need a huge People function to start building out these support structures and to start feeling the benefit.

If you’re a thriving start-up, we think it’s helpful to think of yourself as a high performance sports team. The reason the best sports teams invest in specialist coaches and support staff is because it makes the people on the pitch perform better.

Successful start-up founders recognise when they need to pivot from a boot-strapping, ’everyone has to muck in’ type mentality, to a high performance mentality where everything’s focused on striving for outperformance.

Hiring a Head of People at this transition point can make a real difference. You can start to take away the ‘drag’ of people admin from your managers and star performers, so they get the time and headspace to focus on driving the business. And you can start to put the systems and People products in place that stretch people’s performance, support their development and keep them happy and healthy.

3. Hire a Head of People when you know you’re going to grow through 100 people

We’re big on Dunbar’s Number here at The Pioneers. It’s a crucial transition in the life of a scale-up, when the founder’s ability to influence people’s decision making and behaviour starts to markedly decline, and the structure or system in which people work starts to become increasingly important.

We’d argue that it’s very, very difficult to get through this transition successfully without a great Head of People. You need someone who can really understand your people and your business. Someone who can help you foresee the challenges and opportunities ahead, who can bring an independence of mind. Above all, you need someone who can build People products and systems that reflect your distinctive purpose, brand, values and cultural aspirations, and create a great user experience for your people.

What should founders focus on before they’ve hired a Head of People?

Finally, if you’re not quite at the point where you need to Hire a Head of People, here’s our advice to founders on what to focus on from a People and Culture perspective:

Try not to incur unnecessary people debt. All start-ups incur people debt (the accumulation of shortcuts, workarounds and bad management practices that start-ups tolerate in order to keep moving fast). But some of this debt is unnecessary. You have to do things like giving people employment contracts, onboarding new hires, making sure people take holiday etc - and if you work with an external partner (like The Pioneers 😉) it’s easy to automate these processes, ensure you’re legally compliant and to get them done well from the start.

Focus on communication. Start-up founders have to be great storytellers. If you want people to work together effectively, you need to develop that sense of shared consciousness you get when people are grounded in a shared narrative. So keep reconnecting with your company’s purpose and why you exist. Keep talking about your operating context, the problems and priorities you’re focused on and your vision for the future. You can download a copy of our company narrative canvas if you want a framework to help you articulate your company story.

Get yourself a good coach: at The Pioneers, we talk about four influences on company culture:

a. The personality, values, behaviour and attitudes of your founders

b. Events

c. Meta-cultural norms

d. The structure or context in which people work

In the early days, the one area where you can try to be deliberate and considered is in your behaviour as a founder. Working with a good coach will help you reflect on your impact on your team and your influence on your emerging culture.

If you’re not quite at the stage where you need a Head of People, but you’d like some help on the People front, please talk to us about our People Partner Service. We can provide you with an experienced People Partner who can advise on your People strategy, coach your leaders and managers and start to take some of the admin burden off your team.

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