HR Shared Services: Accelerate Growth for Tech Startups

HR Shared Services for Accelerated Growth

This article will talk about the roles of HR Shared Services in helping startups to accelerate growth.

We all know the ample benefits of the sharing economy. 

Think Grab, Airbnb, Mobikes, Taxify, and GoGoVan.

However, the sharing economy is nothing new. The dynamic of sharing an asset among people or departments or companies are known in the technology world as shared services.

HR Shared Services

HR Shared Services are typically administered by a third party agency with the primary aim to take away the HR tasks from businesses so they can focus on strategic tasks.

Some key benefits of HR Shared Services include

  • Continuity and efficiency
  • Better quality services
  • Lower cost
  • More transparency in cost and processes
  • Adoption of integrated solutions to a problem

So how will HR Shared Services fit the startup scenes?

Fast-Growth, High-Technology Startups & Their Prioritised Focus

A tech startup is a company that aims to deliver

  1. new technology products or services to market, or
  2. existing technology products or services in new ways.

(source: techstartups.com)

To explain, a significant difference between a startup and a traditional business is in its ability to grow at an accelerated speed overnight.

Due to the business focus, they are different.

Where startups usually focus on top-end revenue and growth potential, typical businesses focus on profitability and stable long-term value instead.

In fact, growth potential became even higher with the Internet and capabilities of technology today.

Falling into the Acceleration Trap

Burn out is not just a human ‘thing’.

A company can burn out too.

Startups typically move at fast speed while taking on more than they can handle to meet their growth targets—shorten innovation cycles, increased speed to market, raised performance goals, accelerated order fulfilment, improved customer experience and more.

Certainly, according to multiple sources, human resource strategies are a critical factor in the success of high-growth entrepreneurial companies like tech startups.

(source: Neil Patel on Forbes, Paul Graham, Janine Truitt…)

The Often Overlooked Factor of Success: Workforce Strategy

According to Paul Graham—who had funded many successful startups, including Dropbox, Airbnb, and Reddit, among others—you need three essential things to create a successful startup.

  1. Start with good people
  2. Make something customers truly want
  3. Spend as little money as possible

(source: paulgraham.com)

So, let’s focus on people.

How can you scale your business without a sustainable and resilient workforce?

Startups are continually working on raising money. They tend to run leaner from necessity and as a result, rarely see a reason to have HR strategies or talent management.

However, the considerations of workforce strategies and perhaps even the adoption of HR shared services should be as early as the fundraising strategies.

From the recent huge debacle surrounding Zilingo, we could learn a thing or two about the importance of human resource strategies.

To do that, we will need to know the story.

The Fast-Growing Online Platform for B2B

While many companies had resorted to letting go of their employees during the Covid-19 pandemic, a notable Asian startup that was on its way to unicorn status had to make drastic changes even before that.

Zilingo, the said company, had to table their expansion plan, close up some offices, and started laying off people in what seems like an unwell-thought plan. Hence, leaving a trail of disgruntled employees.

Currently, valued at US$970 million, Zilingo is an online B2B platform started in 2015 by Ankiti Bose and Dhruv Kapoor.

Headquartered in Singapore with offices in Thailand, Indonesia, and the Philippines, Zilingo grew and expanded fast with an estimated 900 full-time staff.

Upward Growth to Downward Spiral & Battered Reputation

Their success is apparent in how they have solved the issues for many retailers by bridging the gap between creators and producers while helping merchants to digitalise, automate, and scale their business.

Early last year, they have raised US$226 million in Series D funding to enable their expansion into the US, Australian and European markets.

In October 2019, they announced their plan to invest US$100 million to build the fashion supply chain business in the US to support its operations started early of the same year.

However, in early 2020, they laid off 44 employees of which majority are Singaporeans, which is a third of its 103 full-time staffs in Singapore. Consequently, the expansion plan halted and offices in the US and Australia shuttered.

The reason behind Zilingo’s wounded brand reputation is beyond just the disgruntled employees from mishandling during the cut. 

Consequently, it leads to the opportunity for other high-growing startups to ask themselves this.

How can we avoid having to reach the stage as Zilingo did?

Is HR Shared Services an Answer to Workforce Resilience?

Easy to Use Self-Service Platform to Share Tasks with Employees

HR Shared Services usually comes with a self-service platform. 

Also, 60% to 70% of the time and efforts of HR is spent on transactional processes like from preparing contracts to executing releases. (source: hrtrendinstitute.com)

Therefore, having employee self-service will free up the team to focus on other strategic tasks rather than tactical.

Your Startup Covered With Integrated Services

A sufficiently advanced HR Shared Services firm usually offers all the typically HR services. For instance,

  • Search
  • Recruit
  • Talent Management
  • Coaching
  • Data Analysis
  • Payroll
  • Employee Sentiment Prediction
  • HCM – Human Capital Management

Also, some firms include HR consultancy to the services above. Thus, that provides businesses with combined solutions a fast-growing company needs.

Be sure to look out for the payment model and services that suit you best.

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Amos Tay

Amos Tay

Amos Tay is the Senior Partner of Hatch Asia. He is a Gallup-Certified CliftonStrength Coach and lead our executive search, coaching and expand our partnership development across the region.

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