The Expert Guide to Building HR for Startups

Jour fixe

HR for startups is itself a unique breed of HR. There’s two reasons for that: In many cases, a startup is truly ‘starting from scratch’ when it comes to their HR processes. Second, few businesses move at the potential pace and speed of a startup. 

The combination of both is, admittedly, a tricky mix. But, what founders and leaders of startups need to know is that HR can be your ace in the hole – your competitive advantage to help your organisation perform better and grow even faster. In this guide, we explain how.

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What Is HR for Startups?

Human resources, otherwise known as HR, is a specialised department that takes care of the people in your organisation. They help manage the employee lifecycle, which ensures that employees enter (and exit) your business smoothly. 

When it comes to HR for startups, specifically, the problem is that there really isn’t a concrete definition across all startups. That lack of uniformity is the key issue – because, in a highly-regulated and litigious field like HR, you can’t simply go your own way. 

Should Startups Invest In Their HR? 

Definitely. Any startup relies on its top performers to help advance their product or service, grow their business and reach their goals. HR for startups can help support and protect your most important asset: those top performers on your team.

The problem is that HR requires a lot of training and a lot of specialist knowledge in the fields of HR. Founders and CEOs of startups often take on the project of managing HR without having either, which is bound to cause issues with compliance and processes. 

These issues then trickle down to the entire company. The result can mean disorganised processes, frustrated employees and an en masse reduction of productivity. Already out of the gate, so much potential is out the window. 

Startups should invest in HR, so that they can protect and perfect their most important asset: their people. When they have processes catered to how their employees work, they can help boost performance (and avoid running afoul of the law). 

Is HR Good for Startups? 

As it concerns growth and hitting business targets, HR for startups may be one of the most critical levers that any CEO, founder or executive staff member can pull. That’s because HR has direct oversight on: 

  • Attracting and hiring new talent 

  • Developing employees to perform their best 

  • Retaining the best talent to maintain a centre of excellence 

Without an HR department, most startups simply leave all three of the above to chance. The responsibilities of your HR department, or whoever is managing it, should be to reduce that variance and create more of a ‘sure thing’ from your staff. 

In that sense, HR for startups is good because it fosters a sense of consistency. Especially as you scale, this consistency can prove invaluable – it means that the processes you introduce can grow, at scale, to match your company’s growing needs. 

How Do You Build an HR Department for Startups? 

The structure of your HR department may vary wildly. It depends on the size of your team, your capacities and who you have to get the job done. For our purposes today, let’s suggest that a founder, CEO or high-level executive is currently running your HR efforts. 

In cases like these, the best way to build your department is to start with a solid foundation. That means seeking out a selection of processes that you want to have managed, and that can be managed in a secure, easy, automated and legally-compliant fashion. 

Often, that comes down to having HR software

An HR software is specifically designed to take away some of the more monotonous tasks away from HR departments and executives alike. It is also designed to facilitate ease-of-use for employees, so they can make changes themselves. 

Personio, as an example, helps to recruit, manage, onboard, develop and pay your employees. It’s an all-in-one HR software designed to upgrade your people operations for now and into the future – which is especially important when your business itself is growing. 

Especially in the case of HR for startups, it’s fundamentally important to maintain as much flexibility as possible. As you scale, you want to make sure you have a solution that grows with your needs – while getting all of the fundamentals exactly right. 

Personio can help. Speak with one of our HR experts today to learn more about our HR solution for startups. Or, continue reading this article to learn even more! 

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What Should HR Do For Startups? 

There’s a lot that you can have your HR department do in a startup. But, where are you going to derive the most value? Where can your HR professionals or processes have the most impact? 

Your HR processes, taken together, can define the success of your organisation. Below, we want to focus on some of the essential HR processes for startups that can make a difference…

Attract and Grow Your Top Talent

An HR software enables your staff by helping bring them through the door. As your startup grows, so too do your recruitment needs. Your HR department will be a critical lever in terms of growing your staff and maintaining a culture of excellence. 

How? The first is the logistical side of things. Planning interviews, designing the process, hosting those interviews, reaching out to candidates, gathering feedback and helping make critical hiring decisions. That’s a lot of work for any one founder or CEO. 

Second is raising the bar. Maintaining a high bar for talent is critical, especially when you can only hire once for a role per quarter (or per year). You need to ensure that you’re hiring exactly the right person, and your HR team can help you do that.

Lastly, by making sure that key talent doesn’t slip through your fingertips. Candidate experience truly matters, and you want to deliver an experience that an employee will love – even before their first day on the job. 

Maintain Excellence in All the Fundamentals

This is where things get a bit dull. But, don’t let that distract you! Getting all of the documents and policies correct is absolutely fundamental. If you don’t do it, you run a lot of risk – potentially even being in violation of the law. 

HR for startups should spend the majority of their time in this section of work. They will need to build out a powerhouse in terms of document management, employee files, policies and everything else that helps ensure what is known as organisational effectiveness. 

Ask yourself: 

  • Do we currently have employment contracts? 

  • How are these contracts signed? 

  • Where are these contracts stored? 

  • What kind of policies do we currently have?

  • Do we have a vacation or time-off policy?

  • Have we conducted a health and safety (H&S) assessment? 

  • Do we have everyone’s right to work documents? 

All of these things are critically important. And, most of all, cannot simply be kept on an Excel sheet. Many HR teams, or whoever is managing an HR function, will turn to some kind of HR system to make this a reality. 

For the busy CEO: Another tip when it comes to HR for startups is to leverage employee self-service more and more. Trust your employees to keep their documents up to date, and don’t make updating critical information a barrier to entry for them – or it might never happen. 

For the entire company: Having a holiday policy is one thing, but how do you track it? Even in a company of 20 people, the sheer amount of requests and tracking can be overwhelming. Think about not only how you structure a holiday policy, but how you manage it, as well.  

Ensure Onboarding Gets Results 

It’s no wonder why onboarding is so often profiled as one of the most important stages of employee experience. First impressions matter, and employees starting out at a new company need to hit the ground running – especially at startups. 

A critical role that HR has to play here is ensuring that this process runs smoothly, and that it works. But, it’s very hard to do both at the same time – if they are both in disarray. 

Let’s start with the first. To deliver a successful onboarding program at scale, it needs to be as automated and streamlined as possible. That means your new employee needs to receive all their tasks, and reminders, when they need them and when they need to get done. 

Only then can you focus on the more qualitative elements of onboarding, because you will have more time. Do you look to write a company handbook for new employees? Institute a buddy system? Maybe start an AMA session with the CEO for some top-down culture exchange? 

For CEOs: Creating an onboarding workflow can save you an incredible amount of time and money with new employees. You can ensure they are asked for all the right documents, like their new starter form or right to work documents, in a single click of a system. 

For HR: Having an onboarding workflow that you can edit and alter and grow over time is incredibly valuable. It means you can track the success of your program and make changes as they appear – and then deliver them at scale. 

For the entire company: Now, everyone can have an amazing start into their careers. Engagement goes up, productivity goes up, long-term retention goes up and your entire company benefits. A real win-win proposition. 

Create Growth & Development Programs

Performance reviews. When managed incorrectly, nobody ever looks forward to them. They are often considered a burden to manage, which then trickles down into every other facet: a burden to host and a burden to attend! 

But, this is where HR for startups can play a vital role. Performance reviews matter, and they have a direct influence on employee happiness and productivity. When you run reviews regularly, and conduct them properly, they boost business. 

Your HR team should have their finger on the pulse come performance review season. But, they should focus less on the conversations actually happening, and more on the quality of those conversations. So, how do you do that? 

By creating automated performance management cycles! By keying in on these cycles, you can ensure that they are never delayed, that they are equitable (because information is housed, transparently in one place) and that they actually drive performance

Which HR Software for Startups is Best? 

Every startup is unique. That makes deciding on the right HR software for your needs unique, too, because you may have something you specifically want out of a software. 

Consider this, though: The most important thing you can do is put a strong foundation in place. You really need to nail the basics, so that you can make the jump – just like in any business. 

HR is no different. Relying on a system means being able to rely on everything working as it should – like storing documents in a legally-compliant way, automating tasks and reminders to help employees and managing otherwise-cumbersome processes like holiday planning.

You also can’t replace the human touch. An HR software, like Personio, should be designed to complement the work of your expanding HR department. So, as you bring in specialists who can elevate your work, there’s no need to review or revise the basics. 

Personio’s HR software is there to help you get the basics right, while upgrading your people operations for the future. That way, as your business grows, you have a solution that you won’t outgrow – in fact, it will grow alongside you. 

Speak with one of our experts today, or kick off your very own free trial for 14 days. You can see how it works for yourself, and then speak to an expert to help address your needs and both your present and future challenges. 

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