Two words can make a startup executive's eyes glaze over faster than any others: human resources.
Yet startups in particular need to be prepared for personnel crises that can upend the workplace. And HR professionals are finding they need a new set of skills to navigate the charged environment at these companies, say workplace experts.
The role requires a strong enough personality to influence and advise founders, along with flexibility that allows them to handle the pace and uncertainty of startup operations, said Kris Dunn, a former Fortune 500 HR executive who now runs that function at a recruiting startup in Atlanta called Kinetix LLC.
"The biggest mistake [startups] make is to hire someone who's a cop and who thinks it's enough to have an employee handbook and just enforce the rules," he said.
For one thing, the rules keep changing. As water-cooler gossip migrates online to Twitter or anonymous or ephemeral social apps like Secret, Yik Yak and Snapchat, disputes can spread with alarming speed, distracting the rest of the team when they should be focused on delivering a product, said Libby Sartain, former human-resources head at Yahoo Inc.
Startup companies are always "more apt to say 'we want employees active on social media and we're willing to accept a blend of personal and professional profiles,'" said Mr. Dunn.
But that approach requires oversight, he added, and a good HR person "follows everyone's Twitter and Facebook streams to see if anyone's tipping their hand about a bigger issue" that requires attention.
HR leaders must also rethink what's appropriate and make clear what is off-limits. Twitter launched during Ms. Sartain's tenure at Yahoo, and she said she was "shocked" at employees' postings of confidential information.
"One of my younger cohorts explained to me that when you grow up putting on social media what you had for breakfast, you feel obligated to share what's happening all day at work," she said. As a result, she and her team had to draw up policies for which there were few precedents.
Startups can be especially fraught HR terrain because founders often hire friends and acquaintances in a company's early stages, turning personal issues into professional ones, and vice versa.
"Generally speaking, leadership teams will tap their networks for the first 50 or even 70 employees," said Mr. Dunn. "So you've got the duality of professionalism and also friendships that run deep. It can be really funky."
Fledgling companies typically tap a finance or operations person to handle payroll and administrative HR functions. The first HR hire is often a professional recruiter because hiring is a top priority, said Ms. Sartain.
Then that person is often expected to become an HR expert, handling issues from government regulations—many, like the Family Medical Leave Act, kick in after a company hits the 50-employee mark—to the legal minefield of employee relations, said Mark Stelzner, founder of San Francisco HR consultancy Inflexion Advisors LLC.
"If you have more than 25 employees, you need someone" who can focus on such issues as performance reviews and leadership development, said Laurie Ruettimann, an HR consultant who sits on the advisory board of the data-analytics firm Vestrics. "Not a director of parties, not a director of chaos, but an actual head of HR."
Even at the startups she advises, Ms. Ruettimann said she is rarely asked for input about the interpersonal dynamics that create drama.
"I'd love for more people to ask me about the employee who's bringing everyone down," she says. "But at the executive level, you get focused on bigger issues."
That is, until that employee becomes a liability. Then, said Ms. Ruettimann, executives usually just "freak out and call their cousin who used to work in HR and their employment lawyer."
