5 Important Tools for Hiring Employees for Your Startup

Hiring Employees for Your Startup – 5 major considerations

Scaling up a startup through increased hiring is an exhilarating phase in its growth journey. It’s not unusual for venture-backed companies to exponentially expand their workforce year after year. To ensure a smooth hiring process without spiraling out of control, here are key considerations under the umbrella of best HR practices for startups.

1. Employee Handbook

Setting up a uniform company-wide code of conduct is crucial.  There should be clear guidelines on how employees should act in the workplace.  It sounds like no fun, but in reality creating this handbook will help shape the company culture and clarify what qualifies a good candidate for forthcoming positions.

The first step towards defining your culture is drafting and implementing the company’s official employee handbook.  There are plenty of free resources out there that make this task easier.  Here’s an example just for reference.

Generally, an employee handbook opens with some background and the company’s mission statement.  The rules of the workplace follow, including office hours, dress code (or not…), vacation days, salary, benefits, grounds for termination, etc.   The handbook should also state the company’s willing compliance with all of the laws related to employment practices: Title VII, the ADA, the ADEA (for examples).  These laws are concerned with the following:

•       Employment at Will
•       Discrimination
•       Sexual and Other Workplace Harassment
•       Equal Employment Opportunity
•       Disabled Employees and Reasonable Accommodations
•       Procedures for Reporting, Investigating and Resolving Employee Complaints

It’s also helpful to include an Information Security and Social Media Policy, outlining the “dos” and “don’ts” of employee behavior on social media. This will help limit liability on the E&O, Cyber, and Media liability front. For more detailed guidelines, refer to an epl handbook which can provide comprehensive information on employment practices liability.

2. Hiring Policies

It’s crucial to have a definitive hiring policy in place.  Again, there are plenty of resources out there to help with this (here’s a decent example).   The goal with this policy is to set definitive guidelines for prospecting, qualifying, and on-boarding new employees.   You want this document to contain clear guidelines for the whole process from the moment a prospect is put in to the queue through their first day of work.  Here are some things to consider:

•       Prerequisites to be considered for hiring
•       Manner in which job openings are posted / advertised
•       Interviewing process (from screening through each round of interviews)
•       Any required background checks
•       Authorization to present a job offer
•       Any paperwork required post-offer and pre-orientation

3. Firing Policies

Wrongful termination is a big risk exposure no matter the size of the company.  A situation as tense as being fired tends to bring out the crazy in people.

To effectively manage risks within a company, establishing clear protocols is crucial. This includes determining the appropriate circumstances for termination, specifying the boundaries that, when crossed (such as warnings or violations), warrant such action. Equally important is the method of executing the termination. Implementing stringent access revocation procedures is key to ensuring that a terminated employee cannot adversely impact the company’s operations or integrity from within. Learn how to control risk by defining termination processes and safeguarding against potential internal threats.

Keep in mind that procedures will differ for termination for cause and without cause.  Here’s a good place to get started with your termination policies.

4. Employment Practices Liability Insurance

Employment practices liability insurance is exactly what it sounds like: insurance that protects the company when it runs afoul of proper employment practices.  EPL Insurance kicks in for a number of claim scenarios, including but not limited to wrongful termination, discriminatory hiring/firing practices, sexual harassment, alleged violations of employment statutes, and more.  As startups cross the 10+ employee threshold, EPL insurance should definitely be in place to provide a backstop.

5. Outsourcing

It’s important for startups to define their own culture and control the hiring process.  However, the clerical tasks associated with running payroll and managing employees can be a huge time-suck.   Startups should also consider outsourcing some of the HR work when ramping up hiring.  There are plenty of platforms and service providers (zenpayroll, tenacity, trinet…) out there that help automate running payroll and onboarding new employees.

Summary

This short list of best practices for ramping up hiring is a great starting point for most startups.  Companies that implement these few things early will be in good shape to scale rapidly and with confidence.

Got any questions about how to reduce your EPLI liability? Got any questions at all? Looking to go ahead and get a quote? We’ve got you covered! Call us up at (646)-854-1058 or shoot us an email at info@foundershield.com. Either way we’ll be happy to talk insurance with you!