Five tips for handling HR as a startup
When you’re building a startup, it can sometimes be overwhelming as to what to do first. There’s always a long list of things that need your attention – from funding and product development to marketing and sales. It’s easy to see why HR sometimes gets pushed to the bottom of the pile. But the truth is, how you manage people from the very start can make or break your business.
I’ve worked with founders who’ve had to untangle big HR headaches later down the line – and it’s usually because the basics weren’t set up properly. The good news is that you don’t need to do everything at once. By taking a few smart steps early on, you’ll set your business up for success and avoid costly mistakes later.
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GET SUPPORT GETTING THE BASICS RIGHT FROM THE START
Even if you’re starting small, you need solid foundations. That means contracts of employment that are compliant with UK law, clear policies on things like holiday and sickness, and a simple way of keeping records.
Too often, I see startups download a generic contract from the Internet or copy another company’s handbook without tailoring it to their needs. That might feel like a quick win, but it can create serious risks. For example, not issuing a contract on time can lead to financial penalties, and poorly worded clauses can come back to haunt you if there’s a dispute.
The fix is simple: get professional HR support at the beginning. It doesn’t have to be expensive or complicated. Think of it as an investment – you’ll save yourself hours of admin and potential legal issues later.
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CHOOSE A FLEXIBLE PACKAGE OR PROVIDER THAT GROWS WITH YOU
Startups evolve quickly. One month you’re a team of two, and before you know it, you’ve got 10 people and need processes for recruitment, payroll, onboarding, and managing performance and development to keep your team engaged and you ahead of your competition. The HR setup that worked at the start can quickly become outdated.
That’s why it’s important to choose an HR package or provider that’s flexible. Look for something modular – so you can add services as you need them – rather than being tied into a rigid contract. For example, you might begin with basic compliance and contracts, then add in recruitment support, training, or leadership training as your team grows.
This approach keeps costs under control but ensures you’ve always got the right level of support. More importantly, it means HR doesn’t become a blocker as you scale.
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DON’T RELY ON NON-EXPERTS TO “DO HR”
In many startups, HR tasks get handed to the Office Manager, Finance Lead, or PA. On the surface, that might feel efficient – but the reality is different.
HR is a specialist area, and getting it wrong can be costly. I’ve seen cases where well-meaning managers have given incorrect advice about maternity rights, or mishandled disciplinaries. The result was expensive legal claims, damaged reputations, and unhappy teams – and more time spent trying to correct it, than getting it right first time.
If you wouldn’t ask a non-accountant to file your company tax return, why ask a non-HR professional to handle complex employment issues? It’s fine for your team to do the admin, but when it comes to anything with legal or people-related consequences, bring in someone who knows what they’re doing.
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CREATE THE RIGHT CULTURE AND WORKING ENVIRONMENT FROM DAY ONE
Culture isn’t something you “do” once you hit 50 employees – it starts the moment you bring your first hire on board. People will look to you as the founder for cues about how things are done. Do you reward initiative? How do you handle mistakes? What kind of work-life balance do you promote? These things shape your culture before you’ve even named it.
A healthy culture doesn’t just happen. It’s built through clarity, consistency, and communication. Be intentional about the kind of environment you want, and embed it in your policies and everyday practices. For example if you want collaboration, set up ways for people to connect and share ideas and feel safe doing so.
Culture is one of the main reasons people join – and stay – in a smaller business instead of a corporate giant.
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HAVE A PEOPLE PLAN FOR GROWTH
HR isn’t just about managing today’s challenges – it’s about preparing for tomorrow. Ask yourself where do you want your business to be in one, three, or five years’ time? What skills will you need to get there?
A people plan doesn’t have to be complicated. At its simplest, it’s a roadmap that links your business goals to the people you need to achieve them. By thinking ahead, you’ll avoid reactive, last-minute hiring and instead build a team that grows with your vision. When handled properly, HR is a powerful enabler rather than a burden.
By getting the basics right, choosing flexible support, avoiding the trap of non-experts, setting your culture from day one, and planning for the future, you’ll give your business the best chance of success.
Good HR isn’t about bureaucracy. It’s about creating the conditions where your people can do their best work.
This article originally appeared in the November/December 2025 issue of Startups Magazine. Click here to subscribe
