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HR Checklist for Startups – Building your HR department

May 28, 2024

3 Min Read

A company is nothing without its human resources, which is true for Fortune 500 corporations and startups. Small business owners spend over 40% of their time on tasks that do not generate income, such as hiring, payroll processing, and administrative tasks.

However, these processes are also integral, especially for a startup. Since you often struggle to make ends meet and get your business off the ground, you need to rely on your team for success.

If you are a small business that doesn’t have a dedicated human resource department, this blog is for you. We will share an HR checklist for startups that will help you find the right team members, retain them, and smooth operations while being legally compliant. Ready to build a team?

Why Does A Startup Need A Dedicated HR Department?

According to research, 30% of startups have less than 50 employees, where everyone plays multiple roles. So, many small businesses often think having a dedicated HR department is a luxury. Let us tell you it is not; it’s a necessity.

Here are four reasons why you need an HR plan for a startup company:

Find and hire the best person for your team.
Retain top talents for a longer period.
Create scalable and inclusive policies that can help provide your employees with the right wages, well-being, and flexibility.
An HR startup checklist lets you comply with local and international labour laws regarding taxes, benefits, onboarding, and offboarding.
The HR department will ensure the organisation and its employees remain ethical in their behaviour.
The HR team is responsible for navigating through any policy change and ensuring your operations are not compromised.
The HR checklist for startups will help you to set your short and long-term goals and the path to achieve them.

If you don’t want to be among the 23% of businesses that fail due to bad employee choice, then it’s time you implement and follow an HR checklist for startups.

Benefits of Having An HR Checklist for Small Business

An HR checklist for startups can be convenient for managing day-to-day operations, employee lifecycle, and keeping track of business objectives. Let us look into the other advantages of having an HR startup checklist:

It helps build a comprehensive plan to help create a guide map for all HR processes and timelines.
An HR plan for a startup company will help streamline the operational and administrative process; you can increase efficiency, save time and money, and add HR tools to automate manual tasks.
A human resource compliance checklist will help an organisation stay within labour and tax laws and prevent any unlawful activity that can lead to penalisation.
A checklist will prevent uncertainty and costly mistakes that can impact your company’s reputation.
Even a one-member HR team can better grasp tasks and be confident in their administrative powers.

HR Checklist for Startups: What Should You Include

Here, we have broken down the complete end-to-end process of implementing a successful HR process. Let’s get started!

Create a HR Department

Firstly, you need to get started- create a human resource department. You don’t need a multi-member team for a startup. However, a strategic leader who can formulate HR policies and plans is required.

You can start by addressing these informations:

What will be the salaries and benefits?
What will the leave and payroll process be?
What is the employee communication process?
What will the hiring and exit policy look like?

Use HR tools

HR tools like human resource information systems (HRIS), applicant tracking systems (ATS), and collaborative software can help you with employee management. Investing in tools can save a lot of time doing repetitive manual tasks while streamlining the processes.

HRIS tools will manage things like employee attendance, onboarding, salaries, and benefits. This can be especially beneficial for startups, where one employee often plays multiple roles.

Create A Formalised On boarding and Hiring Process

As a small business, you might have a very informal relationship within the corporate hierarchy, but recruitment and onboarding must be formalised. This will ensure regulatory compliance and prevent future liabilities.

Also, by having a formalised process, you can create a positive employer brand, engage with prospects better, and attract top talents.

These are a few things you must include in the HR checklist for startups:

Organisational Culture

Whether you are a startup or an established company, your brand will not just be known by its offerings but also by its employee satisfaction level and company culture. When starting a startup, formulate policies for DEI (Diversity, Equality, and Inclusion), safety and behavioural, and ethical practices.

Economic Considerations

Do you know what keeps good employees? Competitive remuneration. But to decide on that, you must have a proper policy in place. You must include the following things in your HR checklist for startups:

Have a fair and competitive compensation package.
Add benefits like insurance, retirement package, etc.
Leave policies and deductions

Training and Performance Management Initiatives

Just hiring employees isn’t enough. You need to create opportunities for their growth, which serves two purposes: employee retention and satisfaction and the company’s overall growth.

As a startup, you might think this isn’t necessary, but if you want your company to grow, investing in training and providing regular feedback can help. This is one of the must-have points in the HR checklist for startups.

Maintaining Employee Record

Employee data must be carefully stored, including their performance and appraisal details, personal details, and other important information. Each country has its own set of documents that an employer must provide for their employees. Ensure you have a proper storage and security system for this.

Create a Company Guidebook

The employee handbook is an essential part of the HR checklist for startups. It will have all the information for an employee’s daily tasks, leave policies, policies against sexual harassment, etc.

Advanced Onboarding Process

You must make your employees feel welcomed on their first day; this sets the tone for their experience with your brand. The HR checklist for employee onboarding must contain:

Important paperwork that must be furnished during the joining
Access to company-issued laptops and any other important thing that they might need to successfully render their duties
Introduction with team members and any basic training that they might require to get started

Exit Process

Not all employees will stay with you and retire from your organisation. Employee exit policy is an integral part of the HR checklist for startups. It is beneficial for both the employee and employer.

How 6 Pence Helps

An HR checklist for startups is integral for your small business’s success and your employees’ happiness. But when you are just starting out, this can slip your mind and may cost you big in the future.

To prevent such a mishap, you can outsource your HR process to experts.

6 Pence is a leading staff outsourcing agency for staffing and HR recruitment processes in the GCC. We provide tailored, end-to-end policies for your organisation. Our expert recruiters can hire staff who best fit your company’s demands. But our work doesn’t stop there- we will assist with everything from verification of candidate details, visa processing, payroll processing, and other HR processes.

Connect with us to know more.

Frequently Asked Questions

What are HR needs in a startup company?

The HR needs of a startup company include crafting employment and payroll policies, recruitment, training, and creating short-term and long-term goals.

What is a checklist in human resource?

A checklist in HR involves key tasks that need to be undertaken for seamless operations, legal compliance, and employee satisfaction. Every company can have a self-evaluation checklist, and it can be tailored according to its needs.