HR challenges for start-ups are an inevitable part of the small business growing process.

Here are some of the common HR start-up challenges that you can face in the early years of your business.

1. Creating your handbook and policies

There are important branding decisions start-ups need to make and every process & HR policy is brand new. Sorting your handbook and HR policies for employers can be a time-consuming task and a compliance minefield.

Not having the right handbook in place makes it difficult for your workers to exercise their legal rights putting you at risk of substantial litigation costs.

However, far from being just a lengthy code-of-conduct, handbooks and policies can be a great way to encourage a positive work culture and add clarity for your employees.

Outsourced HR support can be a great way for you to script a handbook and policies which present benefits to the reader as well as meeting legal requirements for you as an employer.

2. Restructures due to expertise 

As start-ups grow, people may be promoted rapidly or you may choose to bring in outside expertise to add crucial leadership skills and technical knowledge into the business; this will inevitably mean some people lose their senior positions as people are hired in or promoted above them. This can all cause upset. 

Difficult conversations need to be had but this can transform into a more positive experience when handled in the right way. 

Handled in the wrong way this can lead to a high employee turnover, losing tacit knowledge and a loss of productivity due to low motivation. 

Ensure you build a positive working culture and explore the importance of employee identity within the workplace to ensure everyone has a place they are proud of. 

The most important thing is you ensure fair working practices when moving people to different roles, therefore HR advice is paramount to avoid grievances later. 

3. Restructures due to market pressures

Start-ups are very susceptible to the fluxes in the market. The sad fact is the failure rate for start-ups is around 60%.

For example, Tech start-ups formed very quickly at the start of the pandemic due to a high demand in entertainment at home and remote working tech, but this subsided over time with the compounding effects of chip shortages, reduction in demand for products and the Ukraine war. This led to redundancies at companies of all sizes.

It’s important to follow procedures, even if decisions need to be made quickly, it’s important to speak with a HR professional either externally or in-house.

Get this wrong and you run the risk of reputational damage, employment tribunals or a loss of funding from investors.

You can read more about our HR for small businesses here.

Getting the right HR support

Start-ups often have tights budgets to balance and hiring an in-house HR team is rarely viable. Therefore, finding the right HR support, through a retained HR service, allows you to contact the right HR advice and expertise in a flexible way to suit you and enables you to keep on top of the latest HR legislation. So, you can access HR support when you need it.

At Talk Staff we provide peace of mind with our outsourced HR services, working with start-ups to SME’s through to large complex organisations to support with their development as a people consultancy.