When should startups hire a Chief Human Resources Officer?

For growing businesses, making the decision to hire a CHRO can be a key step to building a long-term workplace culture.

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Any founder will know that having the right people by your side is crucial to creating a successful business. Attracting, developing and retaining talent is therefore essential. But this can certainly be challenging.

For example, a team in a relatively new company may worry about issues such as job stability, especially in the tech sector which has seen many layoffs this year. It may also be difficult to maintain your company culture as you grow, particularly if it’s rapid.

That’s why it’s so important to be completely transparent in your communications with your team. From setting out your expectations clearly and regularly updating them on what’s happening in the business, to asking for feedback and listening to their needs. This is imperative for any founder who wants to nurture a strong team.

But as a founder, your priorities will also change as your business evolves. To make sure you’re keeping your people at the heart of your organisation, it could be time to introduce a Chief Human Resources Officer (CHRO).

So, why might they be an asset to your organisation?

More on this topic – see our guide to the Best HR & Payroll Software

What is a CHRO and how do they benefit a business?

A Chief Human Resources Officer (CHRO) is a role that combines strategic oversight of a business’s key HR needs for its growth plans, along with oversight of all day-to-day HR activities, including hiring and managing employees. As a CHRO is a senior role, typically sitting within C-Suite, the CHRO will usually manage other HR functional managers, who may be responsible for Business Partnering, Operations, Reward, Benefits, Talent and Talent Acquisition.

There are plenty of ways that hiring CHRO can be beneficial to a startup or scale-up. But, here are a few of the key ones.

As your priorities shift with your growing company, the CHRO is your point of contact for keeping you in the loop about how the team is doing day-to-day. This gives essential time back to founders to focus on the vision for the company while ensuring the team is well looked after as you step back.

A CHRO also has an important ‘time economy role’ in a young company. They are experts in making the most of a smaller team by assessing the business’s priorities, and then assigning what is required from internal talent versus what can be outsourced. This helps to ensure that the team is hardworking, but not overstretched.

They’re also sometimes in a better place to make decisions or inform updates to the tech stack. For example, whether employees are spending too much energy on time-consuming manual tasks and when a new tool could be brought in that can reimburse your most valuable resource.

When is the right time to bring HR into your C-Suite?

The first thing to remember if you’re wondering whether to introduce a CHRO is that the maturity of your company is not just about its size.

If you’re finding that your employees have been at the company for upwards of a year, this is a great sign of a healthy workforce that could benefit from professional oversight.

Second, you can also look at the landscape of the senior team. A workforce will often benefit from a CHRO when non-founding members are beginning to feature among senior leadership. This shows that management needs more specialised roles as original members branch out to focus on their specific priorities.

Indeed, with this in mind, a company entering its next round of funding will benefit from a more specialised C-Suite. The CHRO’s specific people role offers a natural progression from this point, by enabling founders to concentrate solely on their next raise.

Third, founders should also map how the priorities of their company have changed since launch. For example, has the people agenda become one of the company’s top three business priorities? This means it’s prime time to bring on a specialist to keep the team valued and well-managed.

Keeping people at the heart of the business

The early days of a startup will see enormous growth, and a founder’s priorities will look very different one or two years in from launch. As you look to shift your priorities around the business, it’s important to delegate where you can to ensure your team remains a strong backbone to your vision and goals.

In short, bringing in a CHRO allows other members of the C-Suite to maintain the company’s trajectory both by freeing up their time and ensuring the rest of the team can further the company’s vision. This role is also key to keeping your people happy and motivated.

So, as the business evolves keep an eye out for the signs that indicate it’s the right time to bring on a CHRO.

Headshot of Babu Vittal of RTP Global
Babu Vittal

Babu is the People and HR Practice Leader at RTP Global

RTP Global
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