To get the voice over of this study, replay our talk with Albane Bressolle, VP People @ Back Market.
Table of content:
- Key Highlights
- Benchmark of HR Team sizes from XAnge's portfolio
- HR roles key takeaways from our researches & interviews
- General takeaways
- Structuring your HR Team
- Seed | 0 - 30 people
- Serie A | 30 - 75 people
- Serie B | 75 - 150 people
- Serie C | +150
- HRBP (Human Resource Business Partner)
- HRBP Jobdesc & profile
- HR Experts
- HR Admin/Office
- Payroll
- Checklist to choose a tool 🔧
- Office/Happiness management tips
- Talent Acquisition
- Outsourcing: Recruitment Process Outsourcing (RPO) and Recruitment agencies
- Resources
- Special thanks 🙏
Key Highlights
- HRBPs functions are present even in early structures. Once the startup is growing, the HRBP ratio is usually around 1/100+ employees.
- The more means are allocated to Business Partnering, the more they can grow from generalists to specialists. Top practices show 1 HRBP/department. Also, we've been seeing a growing interest from startups about "care" roles such as HRBPs. Founders are investing more than ever in HR, People and Culture. - more info
- Admin & Ops functions (payroll, compensation, paid leave...) should be affiliated to HR. Good collaboration between Finance and HR is key to run them smoothly.
- Having an Office Manager is a big plus. On top of "managing the office life", an Office Manager can also help out on certain admin tasks. In a time when workplaces are increasingly focused on remote work and international teams, Office Managers have a role to play in ensuring an enjoyable experience for employees.
- Management in HR teams usually consists of a VP/C-Level at the top, Head of (TA/HRBP) in the middle, and then Senior/Lead roles.
- Don't be afraid of part-time! It can be a quick win for your HR team to find an expert without going all-in with a full-time person.
Benchmark of HR Team sizes from XAnge's portfolio
This benchmark is a non-exhaustive look at how other startups in XAnge's portfolio built their HR team. We've selected companies with teams ranging from 65 to 1.500 employees.
Caption:
FTE Learning/Career: dedicated FTEs on learning or career development, to be hired included.
Office Manager: #FTE, to be hired included.
RPO: including past contracts
HR ops: #FTE in charge of admin tasks (payroll, paid leaves...), to be hired included.
HRBP: #FTE with HRBP position, to be hired not included.
Name | FTEs (≃) | HR Team size (≃) | HR/FTEs % | HRBP | HR Ops | HR ops owner | Office Mgr? | FTE Learning/Career ? | RPO? |
---|---|---|---|---|---|---|---|---|---|
75 | 4 | 5% | 0 | 1 | FINANCE | NO | |||
85 | 2 | 2% | 0 | 2 | LEGAL | NO | |||
110 | 11 | 10% | 1 | 2 | HR | YES | |||
115 | 5 | 4% | 1 | 0 | FINANCE | YES | |||
130 | 7 | 5% | 2 | 2 | HR | NO | |||
160 | 8 | 5% | 1 | 3 | HR | NO | |||
180 | 11.5 | 6% | 1 | 3 | HR | YES | |||
180 | 5.25 | 3% | 1 | 1 | HR | NO | |||
200 | 3 | 2% | 2 | 0 | FINANCE | YES | |||
230 | 12.5 | 5% | 1 | 3 | HR | YES | |||
240 | 10 | 4% | 2 | 4 | HR | NO | |||
1500 | 30 | 2% | 5 | HR | YES |
HR roles key takeaways from our researches & interviews
General takeaways
"We often neglect our own team needs and recruit when it's already too late." - Noëlla Gavier, Chief People Officer @Welcome to the Jungle
We have found that HR teams are excellent at identifying the need for job creation in other teams, but not their own. Having enough bandwidth for the HR team (i.e. enough FTE dedicated to HR) is key to be able to help the other teams in their HR needs. In short, "put your oxygen mask first to help others".
As strange as it may seem, between the moment you identify the need for a new HR position in the team and the moment you've recruited, onboarded, and trained the new collaborator: so much time has passed that you "almost" need 3 more persons.
For Noella, there are 2 best practices that have helped her over the years to manage Welcome's team growth:
- Always having enough Recruiters
Nowadays, recruiting great Talent Acquisition Managers is becoming really hard: a saturated market with high demand and low availability.
To prevent "shortage" from happening, you should always incorporate HR needs in your Hiring Plan. Overall, the size of the HR team must be thought out according to what the company will look like in the next few months. - more information here
- Creating processes that can evolve with you and your company's growth
An honest mistake a lot of teams make is to spend time every year rethinking them. You should rather improve them over time.
When you're tooling up, you should always think of tomorrow's needs to have flexibility. If you are 50 today, choose one that could support you when you'll be 250. → Your HRIS is a great example. - more information here
If there are a lot of people to recruit, it takes a lot of people to onboard them into the company. - Lucie Guinois, VP people @Skello
If your company is in a hyper-growth stage, it can be a mistake to not grow simultaneously your HR and Talent team. Recruiting is great but if you do not dedicate the right amount of resources to your retention, career tracks and learning: you will have a high turnover rate. You should start considering those factors once your team is approaching 100 FTEs.
Keep in mind that the more your startup grows, the more you'll need to conform to legal obligations (CSE, work time monitoring...). This translates to more admin tasks for the HR Team and the need for new team members.
Structuring your HR Team
Also, these are generic startup development stages. Obviously, it can be different in your company depending on localizations (e.g. more than 2 offices around the globe), remote policy, hires planning, growth planning ...
There are different stages of HR needs depending on the size of your company. You'll find below an example of what those stages could look like:
⭐ The north star for tech startups is an employee-to-HR-ratio of 5% - HR Team sizing talk (21/09/2021).
Seed | 0 - 30 people
Suggested team sizing: 1 to 2 people (including part-time and interns)
Key challenges:
Recruiting A-players and make sure HR basic employee management is done.
Key functions:
- Admin and Basic employee management
- Talent acquisition
Serie A | 30 - 75 people
Suggested team sizing: 2 to 4 people (including part-time and interns)
Key challenges:
Same as Seed +
structuring HR policies and processes to support team growth.
Key functions:
Same as Seed +
- Legal and Compliance
- Mid-level management
Serie B | 75 - 150 people
Suggested team sizing: 4 to 8 people (including part-time and interns)
Key challenges:
Same as Series A +
implementing actions for higher retention (career paths, compensation & benfits...) and building management layers with more seniority.
Key functions:
Same as Series A +
- Compensation and Benefits
- People partner and ops
Serie C | +150
Suggested team sizing: 8+ people (including part-time and interns)
Key challenges:
Same as Series B +
adapting your HR strategy for a global scale when going international.
Key functions:
Same as Series B +
- Learning and Development
- Onboarding/Offboarding
- Relocation and local experts
HRBP (Human Resource Business Partner)
According to our researches, Business Partnering is a key position to fill when a startup is scaling, starting at 30-50 employees. HRBPs functions should be part of someone's job description in the first HR hires.
The more your company grows, the less your Head of HR/ VP People will do hands-on tasks. The HRBP functions he/she took care of will need to be managed by a more operational HR.
It all boils down to allowing your HRBPs to only focus on what they do best: providing support to people in your team.
Therefore, a startup shouldn't wait to hire an HRBP (at 100 FTEs) to have HRs taking care of the below-mentioned tasks, even if it's only on a small scale.
Variation: Therefore, if a startup meets certain conditions (multiple business units, a lot of middle management, young team leaders...), they shouldn't wait to hire an HRBP (at 100 FTEs) to have HRs taking care of the below-mentioned tasks.
HRBP Jobdesc & profile
"In terms of data, my experience tells me that a good ratio is an HRBP for 100+ employees." - Albane Bressolle - Chataigner, Chief People Officer @Back Market
We often see HRBPs multitasking between admin tasks and their core ones, especially in smaller teams.
In a perfect setting, Business Partners would not have to deal with all the noise that comes from admin tasks. It will allow HRBPs to focus only on their main job: inspiring and helping leaders to reach their goals.
The ultimate luxury for startups would be to have a dedicated HRBP per department. Startups are starting to move towards this goal, like Agicap for example, and their current hiring spree for HRBPs.
One thing is clear: the more senior, the better for an HRBP. Why? Simply because they must be able to handle complex subjects like compensation and learning & development before you hire experts. Usually, they have 5+ years of experience in HR before becoming a business partner.
There are different views on whether they should be admin-free or not.
→ For some, it's a key element for HRBPs to be effective in their job.
→ For others, their workload isn't heavy enough to remove admin tasks and doing "the paperwork" helps them know their assigned team.
Their core missions are (but not limited to):
- HR Processes Engineering
- People Development & Coaching
- Ensure good communication with the Executive management’s
- Employer branding and Culture
HR Experts
The earlier you are willing to allocate resources to hire key HR experts, the easier it will be to structure your team for the long run. It also means that you will be able to hire great profiles for a better price because the scale of their scope, being related to the size of your team, will be smaller.
"It’s never too early: get your HR hire as early as possible" - Albane Bressolle - Chataigner, Chief People Officer @Back Market
The 2 main types of experts are :
- Compensation and Benefits:
Compensation & Benefits experts are a great example of key HR Experts hires that occur when a startup is scaling.
To get a sense of when to hire a Compensation & Benefits expert, here are some insights we gathered from our call with Virgile Raingeard (CEO @Figures):
→ Voodoo: around 100 employees: considered a pretty early hire
→ Doctolib around 1800 employees: considered a late hire compared to standards
→ Back Market around 200/250 employees: one of the first hires of their HR team that shows how "structure driven" they were from the get-go
→ ManoMano around 400/500 employees: standard timing
→ Payfit just hired one at 400/500 employees: standard timing as well
- It makes it easier for your employees to see what they need to do to get to the next step of their career internally.
- It's never too early to address the topic: start with tools like Figures that you can use to compare data with the market.
- Starting at 300 FTEs you should seriously consider bringing someone full-time on the subject.
If you have a plan to expand, consider it even before: there is a big need to unify your policy in advance when going international.
- Learning and Development:
- Knowledge management to centralize data
- Give support managers in putting career paths in their teams
- Set up and create training programs
"Learning and Development" and "Compensation and Benefits" are two pieces working together.
Your compensation plan is closely linked to the skills one should master to grow in their role. Career path and learning and dev are key retention tools.
When your team is made of a lot of juniors, learning and dev will be key to lower your turnover. If you can show to your employees that they can grow with your company and move up, they will stay longer (and happier). In other words, it’s like perks for your employees.
There is a need to work early on those retention strategies to retain your first believers.
L&D managers are doing more than what you think:
If your team is made of a young demographic, L&D will help compensate for the lack of seniority. For example, Skello has only 6 senior employees/100 FTEs.
HRBP are following the plans made by L&D for their teams.
Because they are so linked (and you won't be able to set them up at the same time) a "chicken or the egg" debate is kind of going on. Some HRs are firm believers that L&D should be set up first because it's more essential for the company. And others think the exact same way about Comp & Ben. There is no right answer, just preference.
HR Admin/Office
Experience is key for employees, whether it's office life or admin-related. Startups are facing new challenges regarding employee experience, to name a few: the growing number of teams in an international setting and the surge of remote working due to COVID-19.
HR should lead the admin while working closely with the Finance dept. Having a frictionless experience for employees on the admin part (payroll, paid leaves...) is crucial for a good eNPS.
For teams crossing the bar of 150/200 FTEs, having 1 person for payroll is not enough anymore. Interns and working students can help absorb the payroll workload, for example:
- Welcome to the Jungle: 1 full-time employee and 1 intern
- AB Tasty: 2 full-time employees
Here's 360 Learning job desc for an Employee Experience Manager:
Payroll
Payroll is a tricky HR function to take care of due to the complexity of labor laws (that are continuously changing).
From all the interviews we conducted, everyone has been clear: externalize your payroll first and then, when you're big enough, hire an expert.
✔ A payroll that works = you never hear about it
❌ A payroll that doesn't work = huge impact on employee's happiness and on the company's financials
There is no "critical mass" number that works for every company.
A payroll agency will also be able to give a first level of answer on social law. Even if your team doesn't handle the run, your HR Managers need to understand payroll as a whole.
For example, Skello will start to think about managing the payroll internally at 150 FTEs. For Lucie, it's something to start thinking about when your HR Team is well-structured.
Checklist to choose a tool 🔧
There is a wide variety of tools (HRIS, ATS, People Management Platform...) available to help HR Teams do their work.
⇒ Mirakl launched their HRIS when they were 80 FTEs.
Here's a list of questions to ask yourself when benchmarking a tool:
Office/Happiness management tips
Skello has a cool way of engaging with employees: they elect 3 "Happiness Manager" each month. This enables the HR Team to engage the team, which is great for the culture and enjoyable for the employees who are now invested in the life of the company.
Talent Acquisition
In a smaller team, a HR Manager will take care of the recruiting. Know that recruitment is very time-consuming, it's hard to work on something else. Once your hiring plan becomes more ambitious, it's obvious that you'll need someone fully dedicated to this task.
"From experience, a recruiter handles on average 40 positions per year for generalist roles (e.g.non-tech) vs 20–25 positions for tech roles." - Albane Bressolle, Chief People Officer @Back Market
Start with a full time generalist Talent Acquisition Manager/recruiter. When your hiring needs get more specific, you can structure your TA team accordingly:
- TAMs for general recruiting
- Talent Acquisition Specialists for sought after skills (usually tech and product)
- Campus recruiter for interns and apprentice if you have a big need for junior talents
Example of a Talent Acquisition Team organisation:
"Recruiting should be dealt with internally if the hires are: Volumetric and/or Strategic". - Noëlla Gavier, VP People @Welcome to the Jungle
Outsourcing: Recruitment Process Outsourcing (RPO) and Recruitment agencies
Some startups outsource Talent Acquisition using RPOs but knowing when to stop using partners and rely on your own HR team can be tricky. The great thing about outsourcing is that it preserves the time and bandwidth of your team on projects that make sense. You should not restrict yourself from going to providers for special needs.
Usually, RPOs fees are around 20/25% of the employee's annual salary. Therefore, once that threshold is met (at around 8-10 hires/year )it's more cost-conscious to hire a TA for 40/45k (around 75k with charges in France 🇫🇷 ) than 80k of fees. it's more cost-effective to pay a TA 40/45k than 80k of fees.
Another option could be using Talent Acquisition freelancers (driven by success fees) that basically operate as headhunters for your startup.
Some things to be aware of with RPO:
- Pushing mass unqualified resumes can damage the employer branding and be a waste of time
- The end of the process is always handled by the same managers (final interviews): it can create a bottleneck
Always keep in mind that candidate experience is super important!
Resources
XAnge useful resources
- Check our
VP / Head of People / HR resources
- Take a look at our Talent Database👥
Articles used
How Organizational Staff Size Influences HR Metrics:
HR slack communities to share best practices with your peers:
Special thanks 🙏
A big thank you to Noëlla Gavier, Lucie Guinois, Lina Valencia and Virgile Raingeard for their time and valuable insights that made this study possible.