Everything seems to be coming together for your startup: your bootstrapped team is working seamlessly, investors are happy, and marketing efforts are bringing in even more business.
Now though, you have another issue to tackle. There are a lot of factors to pay attention to as the startup begins to grow, but one of the most critical is Human Resource Management. From developing a strategy to attracting and retaining the right talent, to ensuring all HR regulations are adhered to, HR management can become complicated.
Your HR department will determine:
- What pay is fair for new employees
- What communication strategies you can establish to ensure everyone is on the same page
- How to terminate employees who might not be working out
These are all decisions startup entrepreneurs should deal with sooner rather than later. While you may not need to hire a full HR team right away, read on for six things every startup needs to handle HR successfully.
HR & Payroll Experts
A company in the early stages of development and operation might not need to hire a full-scale HR team. However, the best HR practices for startups require at least someone on the team to be knowledgeable in two primary areas: creating a healthy company culture and HR regulation and policy.
Hiring a part-time HR professional, or even looking at affordable consultants, can help with this. This individual can set the foundation for developing a cohesive culture and good, sound policy. They can also handle payroll, taking a time-consuming task off of your plate and handling all the intricacies that come along with it.
Best Payroll Software for Startups
Payroll software is probably one of the first tools you’ll need to purchase as a startup. Employees don’t tend to stick around long if they’re not getting paid. You’ll want to choose payroll software with strong automation features to limit the amount of time you have to spend on payroll and reduce the chances of errors.
Many software tools either include or integrate with time clocks, allowing the software to pull employees’ hours directly and pay them according to the time they worked. Payroll software can not only save you time, but it can also keep you from making expensive payroll law violations.
Some of the top payroll tools include:
Also read: Gusto vs Quickbooks
A Recruitment Strategy
Recruitment can be one of the major HR challenges in startup companies. It’s hard to compete for top talent with established companies because you don’t have the same level of resources. While your salaries may not be as competitive, you can offset that by offering more flexibility and moving forward with candidates faster.
This doesn’t mean you shouldn’t still pay a fair salary; it just means you don’t have to be at the top of the range.
As a startup, it’s probably best to target recent college graduates as they’ll be looking to build experience. You can likely even start them early as paid interns and then bring them on board as full employees when they graduate. This way, you get employees who already know the business and they’ll be able to gain useful experience before graduating.
Also read: How to Hire For the Future of Work
Best Recruiting Software for Startups
Recruiting software streamlines your hiring process by pushing job postings out to top job sites, so you only have to make them once. As a startup, your IT resources are probably limited, so you’ll need to choose cloud-based software.
You’ll also want recruiting software with artificial intelligence and automation features to reduce the amount of time you have to spend poring over resumes. With these tools, the system can parse resumes for you and automatically eliminate unqualified candidates. You also might want to look for tools that offer mobile accessibility, so you can review candidates on the go.
Here are some of the top recruiting platforms:
An Employee Handbook
This is another policy-driven element startups need to ensure everyone starts on the same page. Creating an employee handbook also causes management to think through questions hires will have about procedures and their place in the company.
Start by answering these questions:
- How much notice do employees need to give before asking for time off?
- How is overtime calculated and allocated?
- Is there a dress code?
- How will the company handle issues of harassment and discrimination?
All of this should be discussed in the employee handbook with the expectation that new hires will read through it and ask any questions they may have. Train managers on the correct answers to these questions.
Track Time and Duties Assigned
Startup entrepreneurs may not have the money to purchase an all-in-one HR management system to track time and compensation. That’s entirely okay in the beginning; there are a lot of free options for having employees track their time and duties completed.
Programs like Trello, Hubstaff, or even Google Sheets can be used to monitor time and tasks, and there are some well-priced employee engagement and performance management software options to help employees stay on track toward goals.
Look for cloud-based applications that allow others to view and edit content as needed. Project management tools are a great way to know if everyone is staying on task and track information to use with performance reviews. Understanding how employees are performing is key to any basic HR management strategy.
Best Time Tracking Software for Startups
Time tracking software is a must for startups that employ contractors to get work done. With these tools, you can ensure you’re only paying for the time the contractor spends actually working. It’s also a good idea to use this software for any employees you’re paying hourly.
With time clock software, employees can track their time online. This time is stored in a database, and the timesheets can then be exported into your payroll system, which is much simpler than making employees physically punch time cards and then trying to organize these come payday.
Startups should consider the following time tracking software:
Create a Strategy for Learning and Development
It may not be the primary priority in the beginning, but learning and development will be critical to any long-term growth and success for a startup. The more training workers receive and the more knowledge they gain, the better they can help the company move forward and promote their own development.
Leaders should work alongside HR professionals to develop a training and development program. This step can look like a monthly workshop where an expert is brought in to train workers on software or processes, purchasing stand-alone or subscription learning management software, or paying for workers to attend training or classes.
Continued education not only benefits the company, but it lets workers know from the beginning that leaders care about their professional development and career goals.
Best Learning Management Systems for Startups
A learning management system (LMS) makes it easier for you to train new employees and ensure they understand your business. You can create custom curricula and quizzes, host video and audio files, and use gamification to keep learners engaged, improving retention.
Even the most qualified candidates will need some training on your processes, and using an LMS ensures all new hires get the same training upfront. An LMS reduces the amount of time you have to spend training your employees hands-on and allows them to learn at their own pace. Some programs even offer a free tier for small teams.
Here are some of the best LMS solutions for startups:
Protocol for Performance Reviews
Workers can only improve with feedback. Someone has to tell them what they are doing right and what they may need to work on. It may be hard to believe, but many companies do not engage in regular performance reviews. This impedes progress, so owners should make sure their startup does not follow in the same footsteps.
Get ahead of the game by working with the HR team (or employee) to develop standards for performance reviews. Plan to answer these questions:
- How often should they occur?
- What should managers be on the lookout for?
- Should it be 360, pulse surveys, quarterly reviews, or does another format work for the team?
The goal is to have a starting point for team leaders to begin to assess how their team is performing. Setting relevant benchmarks and goals is another crucial part, and leaders need to make it a priority. Also, it is critical for team leaders and managers to encourage workers to give feedback concerning the company and the performance of leadership.
Best Performance Management Software for Startups
Performance management software allows you to set goals and expectations for your team and make sure they’re on the same page. Provide transparent evaluations and ensure you’re keeping the right employees.
Performance management software also helps you work with employees to map out their career trajectory, so they can see their growth opportunities within your company. As a startup, this will be helpful for you because you can plan how you want your business to grow.
Performance management tools also allow you to give bonuses based on performance rather than educated guesses, improving employee motivation.
Top performance management tools include:
Do Startups Need HR?
In the hustle and bustle of keeping a startup afloat, owners cannot forget to support their most precious resource: the employees.
Sales cannot happen if customer service is lacking, partnerships are less likely if employees are not ready to facilitate them, and the company will not move forward if workers are not equipped to be innovative and creative.
A company’s forward motion is facilitated by a stellar HR team with an in-depth understanding of sound policy and regulations. HR policy not only helps employees manage their day-to-day administrative needs, but it can also expose them to sensitivity and harassment training and help them understand relevant laws.
Startup leaders cannot leave HR by the wayside as they strategically put the company in a position to grow. HR management gives startup owners the tools to take care of the company’s most vital resources.
Read next: Workplace Trends for Employers to Consider
Chanell Alexander is a writer for TechnologyAdvice. She is a freelance writer and digital marketing strategist. She has over seven years of experience in the nonprofit field, and enjoys blending innovative technology solutions with communications. When she is not writing, Chanell enjoys traveling, contributing to video game blogs, and embracing her inner foodie. See what else Chanell has been up to on her LinkedIn profile and Twitter page.
Top Human Resources Software Recommendations
Rippling is the #1 Rated All-In-One HR Platform. You can onboard new hires in 90 seconds, and easily manage your company's payroll, benefits, HR, and IT -- all in one, modern system. It brings all of your employee systems and data together, and helps automate your busy work. Take onboarding, for example. With Rippling, you can click a button, and take care of a new hires' I-9, offer letter, payroll, health insurance, and more -- 100% online and paperless.
monday.com is a collaborative platform that allows HR managers to manage the entire employee lifecycle in one place. Track the recruitment process of all candidates at a glance, onboard new employees with pre-made templates, plan team-building activities to engage current employees, and leverage data-driven insights with analytics built into your daily workflows. Finally, integrate monday.com with Gmail and 40+ tools you already use so the platform supplements your current workflows seamlessly.
GoCo is modern HR, benefits, and payroll, built for flexibility and ease-of-use in mind. Manage records, performance, time off, onboarding, benefits, and more all in one place. GoCo is a secure, compliant hub for sending, digitally signing, and organizing your sensitive HR documents and data. Unlike other HRIS platforms, GoCo is built to be flexible enough to support existing processes, policies, and providers, so you don't have to change the way you work just to adopt a modern HR system.