Start-ups constantly suffer growing pains that, if not correctly addressed, may become their demise. According to a 2022 report, 90% of startups fail. While there are endless reasons for this, many issues can be mitigated by HR tools for start-ups. Unfortunately, these solutions are often not even considered due to limited budgets, more significant priorities, short-sightedness, fears about the service being too complex, and more.
HR software for start-ups can help build a robust foundation for a company by providing access to top talent, proper onboarding, legal compliance, payroll automation, and many other features. Since every company’s needs vary, the appropriate solution may differ. Making an educated choice can help cut costs and avoid paying for unnecessary features.
Best HR Software for Start-Ups
Moreover, its intuitive interface means that anyone can master it, which is ideal for young companies that don’t have an HR department yet. Gusto offers three different plans to cater to a variety of needs, and its free version provides access to all its features except payroll. Plus, anyone can try its demo by filling out a small form on its website.
Deputy is an HR software capable of addressing the needs of any start-up. It features thoroughly customizable scheduling options, time tracking, real-time notifications, legal compliance, labor cost control, and mobile workforce management, which save companies time and money while ensuring smooth operations. The service is available for iOS and Android for additional on-the-go practicality.
Furthermore, while its Premium plan comes with a 31-day free trial, its Starter plan is free forever. It includes the scheduling of up to 100 shifts per month, holiday and leave management, internal messaging, document sharing, time and attendance tracking, and 24/7 customer support.
Remote can also serve as an Employer of Record (EoR), allowing businesses to hire worldwide without setting up a local entity abroad. Additionally, it supports hiring in up to 70 countries, IP protection services, country-specific competitive benefits, and support with HR and legal experts. The service provides a free-forever plan with plenty of features, a demo, and special discounts for start-ups.
Furthermore, OnPay doesn’t hide features behind tricky fees, so you get the complete package for one affordable price. While it doesn’t have a mobile app, it has a responsive web version almost identical to its desktop app. Although it doesn’t provide a free version, the company offers a 30-day free trial and seasonal discounts that may come in handy for budget-conscious start-ups.
All this can help start-ups make their HR processes more efficient and save time. While there isn’t a free-forever version, and some features come as an add-on, Zenefits provides discounts on longer subscriptions and a demo to check out the software.
Why Start-Ups Need HR Software
The best HR software for start-ups can simplify, streamline, and automate a myriad of tasks, therefore freeing up time to spend on other core initiatives. Business owners spend up to 40% of their time on automatable tasks, making HR software an invaluable solution.
Start-ups often begin with small teams that require employees to be a jack-of-all-trades. HR software not only puts a stop to this potentially stressful multitasking but also makes it possible to successfully manage a team without a dedicated HR department.
Benefits of Implementing HR Software in Your Start-Up
Small businesses and start-ups should see HR software as an asset, particularly if they seek rapid growth or have complex HR requirements like international hiring or regulatory compliance. There are many ways in which HR software can help:
- Hiring: From sourcing to onboarding, HR software can untangle the complexity of recruiting top talent by providing a candidate database, automated job postings, applicant tracking, screening, digital onboarding, and other helpful tools.
- Control and Transparency: Tools like staff feedback tracking, goal setting, performance reports, and self-service platforms help boost not only employee engagement but also reduce administrative burdens.
- Gaining Time: Automation tools help streamline and reduce time-consuming tasks like payroll, accounting, and onboarding.
- Streamlining Processes: HR solutions allow you to streamline payroll while ensuring all taxes and benefits are correct. Some even process all this automatically.
- Remote Work Support: HR software provides simplified ways to manage a remote workforce through support, resources, and communication tools, helping keep the team engaged and productive.
How To Choose the Best HR Software for Your Start-Up
HR departments are usually responsible for various tasks, and HR software aims to cater to them all. As such, providers of this software typically offer various pricing models, tiers, add-ons, and more. This can be confusing and overwhelming for newcomers, resulting in them signing up for unnecessary tools. It’s worth researching what your company needs explicitly before acquiring software to avoid this.
Nonetheless, there are prominent features that every kind of start-up should be on the look-out for:
- Payroll Processing: For payroll, tax, and benefits calculations.
- Recruitment Tools: Helping to streamline the sourcing, hiring, and onboarding of employees.
- Compliance Management: Ensuring adherence to country-specific labor laws and regulations.
- Performance Management: Supporting employee development with goal-setting tools, progress tracking, and feedback.
- Integrations: This service is often compatible with existing software, such as accounting and payroll apps.
- In-depth Customer Support: Providing broad access to customer support, training resources, HR advisors, and more.
Creating an HR Plan for a Start-up Company
When starting up, it’s crucial to create a steadfast plan for your HR operations, and this applies to a business of any size. This builds the strong foundations to help you stay on point and organized, making your company successful.
To ensure your start-up is heading in the right direction, it’s worth laying out your vision:
- Goals and Objectives
- Recruitment Requirements
- Policies and Procedures
- Software and Tools
- Compliance and Legal Matters
- Hiring Strategy
- Performance Monitoring
1. Goals and Objectives
- Define the short and long-term HR objectives of the company.
- HR goals should work hand-in-hand with business goals.
2. Recruitment Requirements
- Pinpoint what types of employee skills the start-up requires.
- Calculate how many employees are necessary to meet the company’s short- and long-term goals.
- Determine a budget allocation for HR software, hardware, recruitment, onboarding, offboarding, etc.
- Account for salaries, benefits, compliance, and legal expenses.
- Estimate future cost of recruitment based on growth predictions.
- Make sure the overall financial plan includes all expenses regarding HR requirements.
4. Policies and Procedures
- Outline HR policies for conduct, remote work, anti-discrimination, conflict resolution, and others.
- Make sure policies fit the business’s overall values, principles, and ethics.
- Regularly review the HR plan and ensure it’s always up to date with any industry trends and norms.
5. Software and Tools
- Select an HR software appropriately suitable for the start-up’s needs and includes the essential features.
- Keep scalability in mind to be prepared for growth.
6. Compliancy and Legal Matters
- Stay informed about regulations, taxes, laws, and general compliance for your country and industry.
- Seek legal help with conflict resolution to protect your company and ensure your practices follow the law.
7. Hiring Strategy
- Streamline the hiring process with standard procedures for sourcing, interviewing, and onboarding new hires.
- Outline which sourcing channels are going to be used and how.
- Delineate a profile for each type of required talent and align the hiring strategy accordingly.
8. Performance Monitoring
- Develop a framework for performance management with clear communication channels for feedback and goal setting.
- Determine how possible performance issues are to be addressed.
- Use performance as a metric for rewards like raises and promotions to ensure excellent employee satisfaction.
- Employ sustainable practices: minimize waste, provide a transparent and eco-friendly supply chain, reduce carbon emissions, etc.
HR Checklist for Start-ups
A start-up should see HR as an equally crucial segment of the company as any other if it wants to be one of the few to survive. This ensures employees are onboarded well, feel appreciated and well looked after, and avoids the headache of compliance or tax issues. However, the management of a start-up HR department requires some specific considerations, so it helps to have a checklist:
- HR Software: Use a well-suited HR software to maximize return on investment.
- Hiring and Onboarding: Recruit the right talent for each role within the business and provide a smooth onboarding experience.
- Performance Management: Have a robust framework with goals, evaluations, and feedback.
- Compensation: Have an attractive compensation package to attract and retain top talent.
- Compliance: Ensure the business complies with local (and international, where necessary) laws and regulations.
- Continuous Improvement: Follow the changes and trends of the industry.
- Budget: Be budget-conscious and keep the HR plan aligned with business goals.
- Employee Development: Provide development opportunities, promotions, and programs to improve and engage the workforce.
There’s a common misconception that an HR department deals with just paperwork or administrative tasks, but this isn’t true. HR is one of the foundations of a company, and using appropriate software tailored to a start-up will set it firmly on the road to success.