Six HR mistakes start-ups make and how to avoid them

Making staffing mistakes as a small business on a tight budget can be fatal. Here are the common ones and how not to fall foul of them

If you are just starting out as a business, one of the first challenges that you are going to face relates to the staff that you hire. With few employees, the people in your business make a huge difference to your success so it is something that you need to get right. So, here are six HR mistakes that small businesses and start-ups make and how you can avoid them.

Not investing in a staff management system

One of the major HR mistakes that small businesses make is that it takes them too long to invest in proper staff management software. It is something that you can easily overlook, but a staff management system is enormously valuable. It can give you the ability to manage holiday requests and other time off, as well as planning shifts, keeping track of the hours that employees work and providing information on their availability.

A good staff management system – like the work schedule function of Planday allows you to keep track of the admin side of the business for all of your employees as well as creating working schedules for them. This can make such a huge difference both to employee and employer, cutting down on stress and ensuring that work is carried out on time and hours are not wasted.

It might seem like an unnecessary expense, but a staff management system is undoubtedly something that you will need, so it makes sense to invest in it as soon as possible so that you can reap the associated benefits from it.

Disregarding laws and regulations

Too many start-ups and small businesses find themselves in a position where they contravene the law, and it’s usually not their fault. Despite the best intentions of employers, they can do things that seem fine but simply are not. Sometimes it can be easy to assume that you are doing the right thing by following your own ethics and business knowledge, but you need to be aware of your responsibilities with regard to employment law.

Employment law can be complicated but it is up to you to make sure that you understand it and can follow it. Issues such as acceptable working hours, overtime and more have very specific laws and regulations, and failing to follow them is against the law. If you are in any doubt you should speak to a specialist in employment law.

>See also: Employment law changes in 2023 – Changes to holiday entitlement for zero-hours workers, higher Minimum Wage pay and a bonfire of EU regulation are all on the cards this year

Assuming they don’t need to offer perks

Some employers assume that when they come to hire staff that they don’t need to offer perks and benefits because they are a small business. It’s vital to remember that you need to offer benefits packages that are competitive with other employers in the market. Do some research into what similar businesses offer their staff so that you can understand what is most appropriate for your company.

Failing to offer good benefits and perks can lead to staff being poached by your competitors, and you really can’t afford to lose high-quality talent.

Neglecting their onboarding process

In an age where hybrid working is more common, it’s especially important to get your onboarding procedure spot-on. This will result in happier staff and a higher chance of retaining them.  

Basics like having your new employee’s work set out for them and their tech up and running is a must. Try and sort out some meetings so that they can get on and start building relationships with other team members. Even setting up an event or get-together around their start date can be beneficial. Above all, be supportive and visible to your staff, whether they’re online or in-person.

Once they’ve settled in, ask for feedback from new starters so that you can continually develop your onboarding process.

>See also: How to best manage inductions for hybrid staff – How should small businesses best manage inductions into office culture for new hybrid staff? Sue Temelty of The HR Dept offers practical advice

Ignoring employee development

You might want to focus constantly on the present of the business, but it’s important to realise that many employees are more interested in the future. Looking to the long-term, you need to have a plan in place for employee development. Failing to offer any kind of progression or training to staff can be enough to make them reconsider their position and look to move on from you to further their career.

It’s up to businesses to recognise that their staff can develop and improve, and that this can be enormously beneficial to the company.

Being afraid to fire if it doesn’t work out

Tomas Ondrejka, co-founder of Kickresume says, “Everybody makes mistakes sometimes. Even if you feel good about it at first, it’s impossible to know for sure whether your latest hire will work out. In case it turns out to be damaging to your business, don’t hesitate to act quickly.

“Remember, big corporations might be able to carry dead weight and survive. Startups can’t. This is not to say that you should always look for reasons to fire people. No, that would be detrimental to your employees as well as your business. Still, warning bells are usually loud enough for anyone to notice. Just don’t try to ignore them.

“Sure, it won’t be pleasant and it won’t be easy. But all parties will benefit in the long run.”

Related: A guide to outsourcing HR – Outsourcing HR makes sense for businesses that are too small to have their own inhouse manager. However you need to be clear about what you need from the outset to avoid a one-size-fits-all approach

7 HR software tools ideal for small business – Streamlining your HR functions is key to running an efficient business. Here are seven HR software tools that can help you do just that

Small business HR checklist – HR can feel like a huge investment sometimes. Alongside all the money you’re already spending on rent, wages and other expenses, it’s easy to see it as just another strain on your cash. And when you don’t have any HR expertise in-house either, it’s a challenge to even get started

Ben Lobel

Ben Lobel

Ben Lobel was the editor of from 2010 to 2018. He specialises in writing for start-up and scale-up companies in the areas of finance, marketing and HR.

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