HR Role in Startups

Does the Human Resource (HR) function have a role in startups? Let us look at how HR is being handled in the startups today.

Startups, of necessity, are lean with a flat structure. Mostly, a startup consists of a founder(s) and their core team. With no boundaries between roles and blending being a common phenomenon, the concept of structures, functions and policies may not exist.

Take for example, yourself, who is on the way to establishing your own startup. You will need the right people to be able to accomplish your extensive business plans and your remarkable growth projections. James C Collins once mentioned; A company should limit its growth based on its ability to attract enough of the right people. Either your growth will define the type of people you should have or the people you have will limit your growth. Top talent, you will find, is available only in the traditional brick and mortar businesses and quite expensive for someone playing with a restricted budget.

Look at the recruitment experiences of other startups. Movers in big businesses have been bought over by relatively unknown startups. Among the reasons that most startups shared for going after these top guns is the process expertise and the credibility they bring with them. Enticing leaders from other organizations is nothing new. However, you should not make the mistake of getting together a group of well-known names with no means for them to add value to your startup. The talent being brought in should be able to perform and contribute in the startup environment. Getting top-level managers is a critical success factor for you and the biggest challenge you will face.

The impression of a new recruit about your organisation is shaped in the onboarding and induction stage. When you are paying big sums to entice people into your startup you may want to ensure that the new recruit is accurately sensitized about the company’s culture. What better person than yourself or one of your co-founders to take up this responsibility? This is the practice adopted by Anand Jain, Founder of Clever Tap; We don’t have a traditional HR person. I double up as the HR manager, among other things.While you are still lean and like a family, it would be a good idea to personally introduce the new recruit to all the other members and show her/him the ropes. Make onboarding a grand event.

Simplilearn recognizes that it takes a crucial thirty days for most new employees to fit into the ecosystem. With their “free look” policy, hires in all levels have thirty days to understand and get familiar with the company. In this crucial period they get a view of the work culture of the company and the demands of a startup. You must ensure that the onboarding strategy is one of the differentiators in your recruitment and retention process.

An often neglected but very significant factor in the HR brief to enhance retention is employee relations. As an entrepreneur, you cannot afford to lose human resources after investing in that person. You need to work out strategies to stop attrition and pass on the responsibility to supervisors and ensure that adequate steps are taken to keep the people happy and content. Effective measures must be taken to address grievances and erase discontent. Can you think of one exceptional scheme that you would like to implement? Well, you will have to think within as well as outside the box, like some of the startups have done.

Bengaluru-based InMobi started a bridge assessment programme, which provides employees with opportunities to try out alternate functions in some projects thereby gaining new skills. When openings in these functions come up they are given preference along with necessary mentoring support. Big Basket introduced insight sessions every Fridays, where external experts are invited to talk on topics important to business. Their policies include facilities like housing and transport for backend staff such as delivery boys and warehouse employees. Amenities like work from home and flexible timings also exist. Many startups are increasing the number of women employees and building policies around maternity, sexual harassment and day care facilities. More such initiatives are shared in the article 6 offbeat HR initiatives that worked wonders for my startup.

Ideally, performance management should be the responsibility of supervisors with HR playing the role of an enabler only. Various strategies have been adopted by different startups in this area. You may not have a very formal model, but you should have some means by which to capture employee aspirations and be able to point them in the right direction for their self development.

Media Magic has a Svadhyay (self study) programme where employees do a self review and rating. The supervisor’s role is limited to adding value through comments on the rating only. Some organizations have abolished the concept of in and out time and do not monitor leaves. They focus on timely completion of responsibilities and productivity.

Compensation and benefits is best handled by co-founders in consultation with supervisors considering the tight budgets and the demand for certain kind of professionals. Like most other startups you can embrace this practice using technology to automate the maintenance of records. Alternately, you may also outsource record maintenance. Names of some payroll software providers can be obtained from the internet. To avoid pitfalls in the area of payroll, read the article 5 HR & Payroll Mistakes That Startups Make All Too Often.

You must get serious about learning and development (L&D). It is a critical success factor in the development of your organization’s capabilities that cannot be achieved by just putting together a bouquet of training programmes. A quote from Queen Elizabeth II; It’s all to do with the training: you can do a lot if you’re properly trained. Large companies invest heavily in putting together a team to define their development strategies. For you this will be an easier task, though identifying an owner will be the tricky part.

In any small company people carry multiple responsibilities leading to time constraints. DesiDime provides weekly two-hour self-learning sessions where employees are encouraged to learn and acquire new skills. Instamojo uses a combination of hands-on training and other interactive methods. Some organizations assign mentors who may be internal or external. In addition, there are townhall presentations, role-plays, facilitation and e-learning.

You must take extreme care in defining and propagating your exit management policy. The key point to remember when an employee decides to move on is that you have failed to motivate and retain the person. If it is a person you want to discard, then the failure is in the fact that you were unable to develop the person’s skills to meet the challenges of the role. In one of my interactions with a colleague serving notice, I was surprised to hear him say Sir, you are the only person who talks to me since I put in my resignation. Most people I have been friendly with do not even meet my eye. I too have experienced this ostracism when I put in my resignation particularly in big corporates. In your startup, you cannot afford people to leave the organisation with a bad taste in their mouths. What better accolade than an ex-employee saying that your organisation was the best place that s/he ever worked in. You may want to welcome such employees back, and like repeat orders signify a happy customer, an ex-employee coming back to your fold places your company on a different level altogether. Handle your exit interviews well with the objective of learning about your company and about what is not working.

In the end, I would like to say that if you want to change the world do it through the people in your organisation, because you are the inspiration they look up to. Your managing communication should be strong and firm, such that relations are maintained without leaving any loopholes. Orient and align your leaders to continue with the legacy of your people policies.


1. Rajiv Singh. How startups, in growth mode, are poaching talent from MNCs & global consulting firms. 2015.
2.PTI. Biggest headache for startups: Finding the right people. 2015.
3. Saurabh Deshpande. 7 HR functions start-ups should not ignore. 2012.
4. PTI. Start-ups adopting innovative HR onboarding policies. 2015.
5. Guest Author. 6 offbeat HR initiatives that worked wonders for my startup. 2015.
6. Quora. Which are the best payroll services in India? 2015.
7. Justblog. 5 HR & Payroll Mistakes That Startups Make All Too Often. 2013.