Starting a business is tough—trust me, I’ve done it, too. A new business comes with an unending list of tasks, responsibilities, and risks. In an attempt to remain cost-effective, it’s common for new businesses to pass on hiring a CHRO. This is despite findings that show Fortune 500 companies with a C-level HR leader are up to 105% more profitable.

My team has been delivering HR consulting in NYC for several years now. Based on our experiences, a CHRO has incredible benefits for businesses in the early stages. Here are a few insights on why we believe hiring a CHRO is worth the investment.

Increase the Odds of Surviving at Scale

By design, businesses are preoccupied with growth. Beginner entrepreneurs are often taken aback by the unexpected challenges of rapid growth. As their businesses grow, issues that seemed minor in the beginning can develop into chasms of liability.

Often, this happens because the startup CEO is focused on keeping the business afloat and moving forward. Even a CEO who deeply values their team is not likely to have time to support them in a meaningful way while also navigating the trajectory of the business.

A CHRO is preoccupied with the big-picture internal strategy in a way most startup CEOs could never be. The role of a startup CEO is simply too involved with steering the ship in the right direction—as they should. The CHRO, on the other hand, is able to focus on ensuring the ship is in good condition, and has the right hands on deck to man it.

Who’s Asking the Tough Questions?

As your company’s CEO, you are perceived as the boss—for better and for worse. While having the respect of your team is a wonderful thing, there are few things more difficult for your team than telling you the hard truth. 

I’ve seen the results of a culture of “yes people”, and it’s not pretty. It could be described as an “Emperor has no clothes” effect, in which the flaws of the organization are clear to everyone—except the people with the power to change it. 

Yet, it’s no wonder this effect is so common. When those who report to you have a vested interest in reporting good news, how can we expect them to be forthcoming with the bad stuff? Why should they challenge you when they could say nothing and plead ignorance?

A CHRO rises above these office politics. It’s part of their job to analyze the dynamics of the organization and be honest about the changes that need to take place. Ultimately, isn’t it better to have someone around to discreetly hand you a robe?

Are you using feedback effectively in your organization? Download our free HR consulting resource, Performance Management Innovation, for our insights on how feedback impacts the bottom line.

Keep Employees Engaged

It’s become something of a joke that the employee engagement efforts of startups have more to do with beer in the office fridge than real, tangible opportunities. We know that our teams need more in order to stay with us for the long haul.

It’s idealistic to believe a strong mission statement is enough to nurture a sense of purpose in our teams. Valuable talent needs to be challenged, recognized, and developed—and that requires significant resources. Sustaining employee engagement cannot be a side project for the CFO or COO.

If we neglect employee engagement tactics, we end up gambling with our most precious resource—our people. When retention suffers early on, the path to improving productivity, innovation, and morale becomes a steep uphill climb.

Don’t Stretch Yourself Too Thin

As business leaders, we’re no stranger to delegation when it comes to most of our operations. Yet, some business leaders admit they started out believing they could be their own CHRO and remain effective. 

Yet, when you examine the function of a CHRO, that doesn’t seem realistic. A skilled CHRO should be structuring roles and teams around the CEO’s vision. They should be preoccupied with managing people operations around the business’ objectives, no differently than how a CFO manages the business’ financial operations.

It also stands to reason that the CEO of a growing business may not be able to step back from their biases, which can obscure their decision making as it pertains to their teams. A great CHRO should have a strong connection to the internal culture and formal HR training. It’s rare for a CEO to have either of these things.

See What an HR Consultant Can Do

In the early stages of a business, it can be tough to wrap your head around the expense of hiring a CHRO—particularly if you’re not yet familiar with how they operate.

Investing in HR consulting in the early stages can help by uncovering some of the benefits that a CHRO brings to an organization. From talent acquisition support to guidance through the murky waters of scaling up, it won’t take long before the benefits of a long-term CHRO become apparent.

Through HR consulting, we can work with you to develop a roadmap to reach your business’ next frontier. There’s no one-size-fits-all approach. We get to the heart of your organization’s strengths and weaknesses to create a fully customized plan of action.

If you’re ready to see the difference that HR strategy can make in your organization, I encourage you to contact my team and I at East Tenth Group today.

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