HR Challenges and Plans for Startups

Most business people who are in their inception stage, say those running startups don’t think in terms of HR. Many startups only consider about hiring and payroll. Their thought process gets constrained to these two elements posing them many later challenges. 

If you take professional advice, the experts would advise going for a proper HR management system in order to make everything streamlined. Many startups fail in forecasting things like- how the intervention of one area may affect another area in business, eventually leading to loss and failures. 

Here in this blog, I enlist the five major HR challenges in startups. These are the set of five challenges that any startups face in their work system. Unless they have a proper plan to overcome the HR challenges successfully, the business is likely to face a bad phase without a moment’s delay



It is a common scene that the startups end up in hiring the people within their friend circle or family circle. In the name of commitments, familiarity and comfort, many businesses indulge in hiring their friends, family members and other known associates as their business partners and employees.

The question raised is- was the hiring successful? 

There is no surety. In some cases, it can be favorable and in some-an utter failure. Because the people hired are not on the basis of their potentialities, credits or expertise, but on whom they are- friend and family. If the hiring is positive, it can greatly influence the business in getting into greater heights and accomplishments, on the other hand, if it’s bad, it will miserably affect the business creating a huge loss, which is a matter of concern, especially to a newly launched startup. 

HR PLAN: To keep away from this, the entrepreneurs need to invest some energy composing sets of desires for those first key jobs. This is extremely an activity considering the ranges of abilities that will be essential in those first occupations, as opposed to creating the ideal set of work responsibilities. With an archive this way, startups will have something to quantify the capacities of candidates against, and a beginning stage for conversing with competitors about their experience. This can be done via implementing comprehensive recruitment management software. The Recruitment management software keeps the potential to upkeep the recruitment proceedings streamlined and organized. Every action right from advertising, screening of candidates, conducting the interviews, monitoring the progress, can be tracked here. Even going for a complete and integrated HR Management software can help the business startup in large via taking care of different business functions like payroll, administration, announcements, reporting, attendance, and time tracking and more.



Money is always an issue when it comes to the field of business startups. Because candidates will have their own set of expectations and meanwhile companies will have their own policies and constraints of fulfilling the candidate expectations. However, the matching of the company’s willingness to pay with the expectation of talents determines fruitful hiring.  In the normal system, the salary comprises of a basic pay along with other emoluments like incentives and insurance benefits, contingent upon the level of the job position. Lower-level non-absolved positions might be entirely founded on time-based compensation packages. The prime thought for any startups will be what should be the diverse dimensions and payables ought to be. However, there is enough industry data accessible on the Internet about pay rates for business startups to chart a theory at what will be suitable, in view of the organization accounts. But how far they become successful in coding the right pays is what matters. Proprietors might work for free, but employees have to pay a decent salary at the end of the month so as to retain them. 

HR PLAN: Having payroll software can help the business startups via streamlining the payroll process of the entire set up. Each company has different payroll system and each position will have a different set of payroll calculation. As I said in the prior paragraph, some employees’ pay scale will be based on their working hours and entries based on the time sheet. Manual processing of these calculations can be strenuous and will be bound to human errors. A payroll software, on the other hand, can automate the entire process and keep everything precise and error-free. Even the deductions and other employee emoluments will be efficiently handled by the payroll system, creating no room for confusions and errors.   



A large portion of the government laws in the U.S. that are viewed as HR-related don't kick in until an organization achieves 15 workers. However, there are a few that are not founded on size, yet on different elements. Prime among these is the Fair Labor Standards Act. This is the law that directs the lowest pay permitted by law, a 40-hour weeks’ worth of work, and additional time pay. This law kicks in when an organization comes to $500,000 in income and is occupied with interstate trade. This isn't as large an obstacle today as it was in 1938. That is the reason numerous little organizations cross path with this law at an opportune time.

This is one among the example. There exist different HR laws complying with different state laws and regulations. As startups, they should be equally literate like the major companies on the HR related laws, in order to secure them from future legal threats. The literacy on HR laws will help the startups in keeping their organization in a safe zone at the same time, making employees feel legally safe and protected. 

HR PLAN: An HR software in place can be of great benefit here. There comes many human resource management software that are experts in handling labor laws and regulations of different states and communities. The software can make sure of the employee pay, work hours and employee welfare are in accordance with the law and regulation set by the ruling authorities. Companies can make sure that they are not violating any rules and regulations in their industry. 



In the run of setting up the business organization and creating products and services, many organization fails to timely converse with their employees. Numerous business people get so made up for lost time in the making of their product or service under the impression that every employee working under them is on a similar wavelength. Shockingly, now and then nothing could be further from reality. Without proper guidance and real-time communication, no employees’ effort can head to right direction. Sometimes it will be too late to detect the faults and may have already caused enough damages. 

To me, there are two bits of correspondence that are basic for each start-up. The first of these is the employee handbook. I can hear you currently, "Are you joking?" I am most certainly not. I am additionally not recommending some thick legalistic tome that can exhaust any. Now, the handbook might be simply a short report that sets the desires for everybody that joins the association. It conveys the vision and the way of life that shapes the premise of the organization. It discusses the obligations, individuals ought to expect as an employee, and how to approach their clients. It sets up the principles that are essential from the get-go. 

The second correspondence is feedback. The startups should establish a strong leadership rather than playing a management script for conducting a meeting once in a year. As startups executing the exercise like day by day meeting will help in guiding their representatives in real-time, smoothening the minor alterations of representative execution and conduct. In short, everybody can benefit from quick criticism of their execution. 

HR PLAN: Processing of real-time communication via the integrated management system. An integrated HR system apart from the employee handbook can greatly help the organization in facilitating communication across different departments. Some HR software comes with inbuilt modules like HR announcements that help startups in real-time conversing with their associates. Any important announcements are it the warnings, appraisals, new rules and regularities, be it anything, it can be timely conversed within the system.



If you have been doing the performance feedback on a continuous note, you might not need to fire a worker in the beginning periods. Once in a while, be that as it may, the individual may just not be the match you had trusted the person would have been. Tragically this causes despair for some business visionaries; all things considered, they have made a speculation of time and exertion in this individual, and thus they frequently take always before choosing to release the individual. This is an oversight. It causes efficiency issues, confidence issues, and it conceivably hurts associations with clients and providers that may prompt lawful risk issues. In this manner, terminations should be quick, execution related, and very much archived. 

HR PLAN: An integrated HR system embedded with resignation module can bring great relief to the business as it helps in completing the entire resignation proceeding without any delay or mishaps. They help in dissolving every dispute if any, and timely moving of essential papers bothering like retirement benefits. The software in place can make both company and retiree at ease via automating the entire process.

Have a look at the following blog to explore more about Why OpenHRMS is Important for HR Management in a Startup. Why OpenHRMS is Important for HR Management in a Startup