We couldn't agree more with Matt! Hiring HR early is key to success. We recommend hiring your first HR team member around 30 employees. Full article from Inc. below...
Matt Mickiewicz knows a thing or two about starting companies. The serial entrepreneur is the co-founder of some pioneering companies, including Flippa, and Hired.com (disclosure: I am a small shareholder in Hired). I recently sat down with Matt and asked him about scaling companies, growth, and important hires.
What is the most important hire a company needs to make in order to scale?
Matt Mickiewicz: After doing this a few times, I am convinced you need to hire HR at around 40-50 people. If you don't make the hire at that stage, your company will be in serious trouble.
Why? Your team is the key to your success - HR isn't just about compliance and infrastructure and shouldn't be viewed as a dirty word.
It's an absolutely necessity to be constantly thinking through issues such as diversity, pay disparities and salary benchmarking, company values, career ladders (both management & individual career tracks), equity refreshes, formalized performance reviews, structured interviewing & recruiting best practices and more.
It can create cultural problems within your company if you don't think about extremely early.
Are there any examples of companies that have scaled HR effectively?
MM: I think Fitbit has done a tremendous job of scaling HR. Their work culture reflects exactly the message they are trying to communicate to the outside world - they hold each other accountable for personal health and essentially dogfood their own product.
What is the top issue companies will face with regard to HR?
MM: Yes - without question diversity. Not just gender diversity, but race/ethnicity and other dimensions. The modern workforce will not be able to survive unless its base is diverse, and we are starting to release our own numbers as a first step.
Then as a follow on issue, which is tangential is pay gaps - and again - not just as they relate to gender but other dimensions as well. The companies that focus on solving this problem will be able to recruit the best talent.
What other advice would you give to tech companies looking to scale?
MM: The little things matter, and only get better or worse with time. Things like your maternity/paternity policy, pay equivalencies, and general culture determine whether you will be successful or not. If you can't, or don't have a culture people can identify with, you will churn through employees.
You have to think of "HR Debt" as equivalent to "Technical Debt". 99designs is now over 100 employees, Flippa is at 30 and Hired is over 200 - every company's culture is unique and distinct and that starts from the top. Good leadership is the key.