Structuring HR in fast-growing businesses: Making an impact

Over 75% of corporate organizations feel threatened by digital start-ups. These start-ups disrupt the marketplace, the consumer experience and entire industries by the rapid adoption of new technologies and the agility to deal with fastpaced change. When these start-ups and scale-ups grow further, their focus on product development and marketing will broaden and they will need to pay more attention to their work force. for corporate organizations). In addition to using reputation, values and purpose to retain and engage employees, the start-ups and scale-ups are focusing on providing challenging work with a steep learning curve. Typically, in situations of rapid growth, there is an abundance of challenging work. Digital start-ups often have no formal career development framework and learning and development curriculum; this typically follows when the company is further maturing. Currently, half of the start-ups still agree that despite the lack of formal learning and development opportunities and a career development framework, they do a good job providing opportunities for advancement and promotion.

Transition from founding to leading mind-set

With the specific start-up culture being key to attracting talent, most of the start-ups that were represented during the round-table discussion are in agreement that leadership is crucial to defining and maintaining this culture. Surprisingly, only one of the participants in the start-up study identified leadership effectiveness as a top HR priority at present, but also for the next three years.

Although many participants did not rank leadership effectiveness as a key priority, they did agree on the importance of leadership effectiveness. Leaders within these fast-growing digital start-ups are typically the founders with a strong drive and passion for product development, but not necessarily with the people focus that is required as the business expands. Interestingly, most start-ups see leadership effectiveness and the transition from a founding mindset to a leading mind-set as a shared responsibility between HR and the business and not necessarily as an HR topic (which it is in most corporate organizations).

Structuring the HR function

Disruptive in nature, traditional in structure. Many fast-growing organizations use traditional ways to execute the HR-function, such as benchmarking pay levels against the market, structuring pay levels to control costs and having regular (annual) performance reviews.

Start-ups typically have not set a formal pay-for-performance strategy. Our study