

Startups Should Outsource HR - jack7890
http://jackg.org/startups-should-outsource-hr

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exemployeewoes
The company that I work for is a reasonably sized startup, around 60
employees. We have a small HR department and one person in charge of hiring.
They are absolutely incompetent; they are completely incapable of doing their
job and have been looking for any opportunity to leave for another department,
I have no idea how they still have their job.

This really hurts the company, it blows my mind how such a seriously important
part of the company can be treated so casually. If the person(s) in charge of
hiring at a company aren't putting 100% into it then the ENTIRE company is
affected.

Any opportunity to put HR in the hands of people who know what they're doing
should be taken.

~~~
rdl
I have never met an HR person inside an organization who was particularly
competent or at all fun to be around. Maybe they exist within a few of the
bigger/more successful recruiting organizations (Palantir, Facebook, ...), but
in general, any good HR person will end up being an externally-facing
recruiter. Internal HR people exist to help the company fire people they want
to fire, maintain regulatory compliance, and that's about it.

~~~
ChuckMcM
" Internal HR people exist to help the company fire people they want to fire,
maintain regulatory compliance, and that's about it."

Sadly this is true. I had a startup that was acquired and we went from being a
50 person company to being a 250 person company, and later nearly a 1500
person company. And our original HR person who was more of the
morale/culture/lets stay balanced kind of person, quit after the 'real' HR
people explained to her what her job in HR was. I was helpless to change her
fate and that really bothered me for a long time. After that and later
Sarbanes Oxley and "Regulation FD" stuff were on everyone's mind, the people
that called themselves 'HR' became compliance officers. Their job is/was to
protect the company. That was sad for me.

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rdl
We use Accretive Solutions in Mountain View -- they have an outsourced
HR/accounting/admin service. They can use TriNet if requested, but I've found
a lot better deals (if your employees are in multiple states) going direct.

The zero value add admin/compliance parts of HR are what you should outsource
-- absolutely not the value-add parts like recruiting, internal culture
management, picking unique benefits, etc.

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ericfrenkiel
Services like these are ultimately short-term solutions. Our office manager
was #7 to join and she's been a godsend in helping manage basic HR as the team
has grown.

My advice to any founder is to seriously consider making an OM hire sooner
rather than later.

~~~
ArekDymalski
Definitely hiring a good OM is a crucial move that lets the founder/manager
focus on more important tasks than administrative stuff. However in case of
'hard' HR where up-to-date knowledge of legal, taxes, insurances etc. aspects
is required, OM is not enough.

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zdw
The $150/month seems very low. Every plan I've looked into in my area (AZ) is
the >$500/month/employee range just to run it (no services), and has a minimum
of 10 employees.

Someone could make a mint doing an good job of this online.

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anmol
Does anyone else have experience with using full-service outsourced HR? Even
with an accountant and a good law firm, its amazing how complex HR can be,
given all the nuances of payroll, benefits, contractors, etc.

~~~
hmahncke
We've had an excellent experience with TriNet - highly recommended.

~~~
gchucky
My employer also uses TriNet. We switched from ADP at the beginning of this
year, and it's been a much better experience. They just seem to be more on top
of things and can get us actual answers when we have questions. Their website
for employees is a little funky, but is much easier to use than ADP.

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matsim
In addition to being a major lurker here, I'm also a marketing assistant at an
HR consulting and employer services company. There really is a TON of stuff
that these companies can offer startups.

Most interesting though, in addition to dealing with compliance, taxes, etc. a
lot of HR companies are looking to offer a wide range of services. I'm
thinking of things like manager leadership training, employer handbook
development, onboarding, compliance assessments, job descriptions and
postings, employee satisfaction surveys, etc. etc.

~~~
PostOnce
If you're at the stage where you need employee satisfaction surveys and an
employer handbook, you're no longer a startup, you're a bona-fide company.

A lot of that stuff sounds not only unnecessary for a startup, but downright
wasteful. If you have 8 guys working for you, is that really the most
productive place to put money?

~~~
rdl
Legally you DO need crap like an employee handbook, documentation of signing
off on training or compliance documents (NDA, etc.), tax and insurance
compliance, etc.

It is _because_ that stuff is such pointless crap, yet mandatory, that it is a
productive place to put money vs. founder or employee time.

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erikb
I have no experience in this area, but I think that a HR company finding
employees for start-ups can be problematic. Normally, if you are not a 100+
people start-up, the kind of people you are looking for are not exactly the
ones that are doing well in a standardised, corporation-style application
process. So it's possible you end up with a bunch of corporate people, where
you actually wanted some creative nerds.

------
nirvana
This is true to the extent that the PEO takes care of administrative things
that aren't critical to the culture of the company.... but there should always
be someone at the company whose an employee ombudsman / morale officer, whose
mission is to make sure employee issues don't become problems, and who helps
install a good company culture.

One startup I worked with had a person like this who was bot the recruiting
person and morale person, and they had a dedicated morale budget. Rather than
spend the budget on a monthly pizza party or something repetitive, he'd often
save up a couple months of it and surprise us with something completely
unexpected.

That one guy-- who was not a founder-- had a larger positive impact on the
culture and effectiveness of the company than most of the founders (who at
least get credit for knowing they needed someone whose mission was to create a
good company culture and keep morale up.)

~~~
rdl
In most companies this role is taken by one of the founders (along with
heading recruiting); I'd say the odds of success of the company can be judged
by how long a founder does this vs. hiring someone to do it. Otherwise, it's
usually someone who wasn't hired specifically to do morale (at least in
smaller companies), but someone like an office manager or other manager who
does it as a side project.

It's basically NEVER anyone in HR.

