Why Human Resources Is the Most Strategic Element for Growth: Human Resources is widely considered to be a support function and is frequently treated like one. However, your Human Resources team should be part of your growth strategy, especially when it comes to attracting and retaining top talent. – Guest article by Dennis Schmoltzi, Founder & CEO of Emma – The Sleep Company

I started to realize the imbalance between the importance of HR on one hand and the lack of strategic optimization and handling of people topics on the other hand in many companies when we were looking for someone to lead our ‘People & Organization’ team (as we call our ‘HR’ team) at Emma in 2018. At that time, we were interviewing many people working in HR teams, from big corporates to medium-sized companies to grown-ups.

“Could we imagine taking the candidate on vacation?”

Most companies understand the need to recruit and retain employees. They create special positions like ‘HR Business Partner’ to support the growth of their departments. Almost all our candidates still described the HR function as a support function: preparing and publishing job descriptions, screening candidates and running interviews together with the respective department.

Being asked what they were looking for in candidates, they would give answers related to experience and the requirements each department had set up. Asked how they identify soft skills, team fit or company culture, they often had to pass or were very vague in answering. These questions weren’t considered. The most specific answer I got for team fit was: “After the interview we ask ourselves, ‘Could we imagine taking the candidate on a vacation.’”

I don’t think that a ‘Joint Vacation Check’ is a good approach to decide on team fit. The best team is not necessarily one in which everyone is friends; it’s a team that is strategically built with complementary personalities and skill sets. For example, the ‘Joint Vacation Check’ could easily oust introverted candidates interviewed by extroverts. However, they might be the perfect addition to the team.

Scaling means creating an outstanding team

At Emma, we believe that the only way to be successful at scaling is by creating an outstanding team. If you have a small team, it’s much easier to oversee all aspects of running a company and determining its success. However, as soon as you start to scale and grow, the only way to maintain excellence is to grow an excellent team.

How do you attract top talent and grow an excellent team? And how do you retain the people you have worked so hard to employ? You need to consider recruiting, development, team organization and retention. Involve your best people (top management included) in these topics.  Moreover, you need to make major efforts into building an outstanding ‘People & Organization’ team of strategic thinkers. They will be able to design and implement best practice processes and ensure that strong teams are built and nurtured across the organization.

Instead of an HR Business Partner noting down requirements and publishing job postings, create HR positions that proactively suggests additions to each department, challenges the requirements for candidates and designs structured interviews to unveil what really matters when you’re talking to a candidate. Simply going through a CV in 2 interviews will not do the trick.

“We train them from across the company”

At Emma, we questioned how recruiting should be done and came up with an approach that completely foregoes the candidates’ experience for almost all positions. We focus on their strengths, personality and culture, and clustered them into the following categories: ‘Entrepreneurial Leadership’, ‘Thought Leadership’, ‘Executional Leadership’, ‘People Leadership’, ‘Role Modelling’, and ‘Learning and Growth’.

Moreover, interviewers are not selected based on their job, instead we train them from across the company. We even try to deliberately mix those interviewers with a more intuitive way of reading people and those with a more rational approach, to gain a thorough and well-rounded picture of each candidate. The whole recruiting process has been designed to be fast and convenient for both the candidate and us. We have focused our recruiting activity around what we call ‘Recruiting Friday’, taking place once a week. Each candidate gets a company introduction, up to three clearly structured interviews and an office tour. This gives the candidate a good opportunity to learn about us, and we get enough insights to make a decision either on the same day or latest the following Monday.

Recruiting takes 20% of the founders’ time

As the recruiting decision is so crucial to growing an outstanding team, we have many of our top managers involved in our Friday interviews. This includes my co-founder Manuel and myself. That is almost 20% of the founders’ time, but it is some of the best time spent for our company’s growth and success.

Yet, I see recruiting as only one part of building an outstanding organization. Talent development and retention as well as organizational design are the other strategic pillars, as they are just as challenging as recruiting in a fast-growing company. This leads me directly to the key message of this article: Ensure that you make ‘People & Organization’ a key strategic priority with top management’s attention to establish best practices. It is the only way you will succeed at scaling fast.