In the past — when HR was considered a compliance function — founders waited until the last possible moment to hire someone for the role.
But these days, founders can't get away with bad people practices. Attracting and retaining top talent matters more than ever. Employees choosing an offer from an early-stage startup over one from big tech have high expectations for the experience they will get at the startup.
Founders must focus on culture-building and employee experience, even in the early days. And it won't be long before they will need a full-time employee dedicated to the job.
So when is the right time to hire a first Head of People?
We heard from over 1,000 folks on LinkedIn and the results were mixed.
Here at Gather, we've worked with hundreds of startups as they've scaled from a founding team to Series A, B, C, and beyond. We've seen what works and what doesn't.
In this post, we'll share our own thoughts on the perfect time to hire your first Head of People. But before we start, let's define the role of People Operations and make sure we distinguish it from recruiting.
Recruiters focus on "getting butts in seats" when a startup is ready to scale the team. They post the roles, fill the pipeline with candidates, extend offers, and win over new employees. They are essential for high-growth companies to land the best talent.
From an organizational chart standpoint, a recruiter is likely on the "People" team, but that doesn't make them the de facto Head of People.
A Head of People is someone who builds People systems, defines policies, creates development paths, and lays the foundational pieces of the employee experience at a company.
Occasionally, you'll see a startup hire a Head of People that splits this functionality. Half of their job is recruitment and the other half is People Operations. This is a bad idea.
Since recruitment is a more quantifiable metric and feels more urgent in the short-term, the Head of People in the split role will ultimately become a recruiter at the expense of other, longer-term People needs.
It's fine to have a first Head of People managing internal or external recruiters, but organization-building should be the most important element of their job.
A Head of People shouldn't be a startup's first hire — or second, or third for that matter. While a team is finding product-market fit, they should be hiring product and go-to-market folks. At the very beginning of a company's existence, operations should be lean.
Culture, employee experience, and organizational design matter in the early days of a startup, well before it becomes a full-time job. On most teams, one of the Founders — often the CEO or COO — takes the lead on championing the company culture and ensuring team-wide wellbeing.
When the team is small, it's not a huge task.
That person will have to make some important People decisions including:
But there is not much to do from a day-to-day standpoint. Often People Operations takes up around 10% ofof the founder's time in the early days.
As teams grow beyond 10 people, the founder may offload some People responsibility to someone else on the team — who still doesn't do People Ops in a full-time capacity.
In the late pre-market fit stage, startups often hire someone to help leadership with general operations — an Operations Associate or a Chief of Staff. This operational person can take on some of the duties of People Operations — whether that's creating a performance management framework or building out better tooling for HR.
With other operational projects on their plate, People Ops likely accounts for 20-50% of this person's day-to-day role.
As the team grows, core HR tasks start to rise. When we talk about core HR, we mean items like:
These jobs are more compliance-focused than the other strategic employee experience projects we've talked about so far. It's not fun stuff, but it's necessary. In the early stage, HR tasks fall on a COO or Chief of Staff as well.
Some Human Resource Information Systems (HRIS) — think Gusto or Rippling — provide content and experts to help navigate employment and compliance questions.
Other startups turn to Professional Employer Organizations (PEO), like Justworks or TriNet. PEOs are a way to fully outsource your HR needs to a third party until you are big enough to need to do them in-house.
Need help choosing an HRIS or PEO? Check out our Top HR Platforms for Startups in 2021 report.
You should make your Head of People hire when you exit product-market fit mode and enter into growth mode. At this stage, operational excellence becomes important as you try to scale the business you've created.
Alongside other operations aspects of your business, it's time to invest in People Operations.
Headcount isn't a perfect measure for this, but for most startups, this moment occurs when the team is between 20 and 40 people and planning to double in size the next year.
Some other measures that the timing is right:
A good Head of People hire will know what it takes to lay the foundations for scaling the organization. They'll help you tackle big strategic challenges like:
They'll also help you scale key programs in the employee experience like onboarding, offboarding, recognition, and day-to-day support.
If you hit growth mode and don't hire a Head of People, you may not see the negative results right away — after all, it's a role that focuses on long-term needs, not short-term. But putting off the hire will catch up to you soon enough.
You'll become so focused on bringing new talent onto the team, that you won't build the systems that will help you keep the best people on board.
Teams who scale without a Head of People hit this moment around one year into scaling mode when all of a sudden, everything starts to feel like it's falling apart. Veteran employees who have been around for two or more years become disgruntled and start leaving in droves.
These employees feel like they are floundering and don't have a vision of what years three, four, and five look like with you. So they decide to take their talent elsewhere.
You can't hire fast enough to replace them and your growth stalls as you look to fix the expanding hole in the bottom of your boat.
A strong Head of People hire will help position your organization for long-term success in talent retention. As your company hits growth mode, this role should be at the top of your job board.
Just hired your first Head of People? Here are their top five priorities.
P.S. Here at Gather, we work with the first Heads of People to help them build top-level People Operations programs that scale alongside the team.
