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HR expert advises start-ups: avoid high personnel costs

Author: Rudolf Nydegger, Rietheim (AG)
HR is far more complicated than just finding your employees. Start-ups should learn how to do it or outsource it.
HR is far more complicated than just finding your employees. Start-ups should learn how to do it or outsource it.

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Start-ups are often unable to assume the HR management function themselves. In our interview, HR expert Rudolf Nydegger explains how young entrepreneurs can best handle the challenges.

NYDEGGER Personal/Engineering AG, based in Rietheim near Bad Zurzach, Switzerland, offers start-ups from PARK INNOVAARE exclusive service packages in the field of human resources. In the interview, Rudolf Nydegger explains the special situation of start-ups and shows how they can muster their HR.

PARK INNOVAARE: Mr. Nydegger, many founders face challenges when it comes to personnel management. Is it even possible for start-up entrepreneurs to manage their HR productively if they are supposed to be concerned primarily with their product and the market?

Rudolf Nydegger: It’s impossible to generalize. If the company has its own specialist for HR, it is definitely not a problem. However, it is often the case that start-up entrepreneurs are product specialists that do not know enough about personnel administration. In such cases, it is highly valuable to be able to depend on a reliable partner that can give specific recommendations about social security and take care of all the administrative formalities relating to personnel and payroll.

Where do you see the greatest challenges critical to success? What mistakes should start-ups avoid?

There is a risk that “ignorance” will generate excessive personnel costs – for example, expensive social security solutions or the wrong personnel software. It’s also important not to underestimate the work involved in payroll accounting, where it is important to correctly account for social insurance, correctly prepare the annual VAT declaration, correctly calculate withholding tax, correctly account for it and correctly calculate daily sickness and accident benefits. But there are also many provisions of labor law that have to be taken into account when employees are being hired. In my experience, high-tech companies in particular are faced with a special question: they are often dependent on specialists from abroad. In this respect, it is important to be well acquainted with all the questions of alien law and to strike the right note with the respective Aliens Authority.

What procedure, what model can you recommend for best handling these difficulties?

Young entrepreneurs, when setting up a company, should reach out to specialists who are professionals in their field.

What specific support do you offer young entrepreneurs?

We offer start-ups from PARK INNOVAARE cost-effective service packages in the area of personnel and payroll, enabling the company founders to focus on their core competencies. Depending on the requirements, we provide the companies with one-off support at the beginning (starter package) or afterwards with further personnel services such as personnel administration, payroll accounting, recruiting – all the way to support and other personnel management services.

What minimum size would you say a company should have in order to assume the HR management function itself? Or would you say it makes sense to permanently outsource HR tasks?

There are no guideline values in this respect, either. It depends on the qualifications of the employees. If someone is interested in the topic of HR, is discreet and enjoys the trust of the management, then that company can also manage its own HR, even starting with a very small organizational size. In these cases, it is usually associated with accounting. The larger the company grows, the more important it is to have a well-functioning, competent HR team that not only addresses the concerns of the management but also the needs of employees. We recommend hiring a specialist or using a permanent outsourcing solution in the area of support and other personnel management services.

Do you still have any personal tips for young entrepreneurs? In the end, they are the ones at the center of the company. How should they best handle the high workload?

As young entrepreneurs, they work a lot – often even beyond the normal level. This makes it all the more important for them to find a balance for their work activity and to be able to set personal boundaries.