How To Create an HR Plan for a Startup Company

Building a strong foundation for your startup’s HR is crucial to long-term success. You may feel like developing an HR plan for a startup is like putting the cart before the horse, but it’s far more important than many founders realize. When you start with an excellent HR foundation, your organization will grow and thrive around it.

A well-crafted HR plan ensures your startup attracts, retains, and develops the talent it needs to not just survive but thrive. In this guide, we’ll walk you through the steps to create an effective HR plan tailored to startups’ unique needs, as well as how Mosey can help with business compliance.

Why Does an HR Plan Matter for Startups?

An HR plan is a strategic framework that aligns your team’s goals with the overall objectives of your business.

For startups — where resources are often tight, and growth can be unpredictable — it helps to be equally prepared for a slow start as an unexpected boom. Either can happen.

Here are some of the top benefits of HR plans:

Attracts Top Talent

A clear hiring strategy helps bring the right people on board. Startups usually can’t afford to hire a large team, so they’re often more mindful about hiring the right people. Specifically, you’re looking for multitalented individuals with an innovative spirit and the dedication to kick things into gear.

Defining your ideal candidate and crafting a hiring strategy tailored to meeting this talent where they’re at can help you start things off on the right foot.

Enhances Retention

Employees are more likely to stick around if they see a clear path for development and growth. After all, some employees might view working with a startup as a gamble in the first place.

That said, there’s always a chance for a startup to grow wings and soar, so employees want to know that the work they put in at the ground level will follow them to the top. Consider how your startup’s growth relates to your employee retention strategy.

Builds Culture

HR policies help shape your company culture from the outset. Workplace culture is essential for talented employees looking for their “forever careers.” They want to understand your culture from the beginning and help shape it in the future.

Ensures Compliance

Compliance strategies prevent costly legal issues by adhering to labor laws and regulations. Fees and penalties can financially hamper startups working with limited capital. By being mindful of compliance from the beginning, your startup can make the most of its resources and avoid unexpected expenses.

What Are the Steps To Developing an HR Plan for a Startup?

Without further ado, here are the top eight steps to creating an HR plan well-suited to a startup’s needs:

1. Understand Your Startup’s Vision and Goals

Before developing your HR plan, you’ll need a deep understanding of your company’s mission, vision, and objectives.

You should begin by asking yourself three questions, using your answers as a basis for your long-term strategy:

What is our mission?
What are our short-term and long-term goals?
What values do we want to uphold?

Defining your mission and goals will help create strategies that keep you on track. Meanwhile, defining your values will help you shape a compelling company culture.

2. Assess Your Current and Future Workforce Needs

Next, identify the roles you need to fill now and in the future. There’s often an attainable middle ground — for example, skilled and ambitious employees who can grow from their current roles into future ones. It can be hard to track down a jack-of-all-trades workforce, but keep your eyes open for the right people.

Additionally, outline the key responsibilities, skills, and qualifications required for each role. Predict future hiring needs based on growth projections and industry trends, and identify the skills your team currently possesses and the gaps that need to be filled.

Ultimately, your workforce is a work in progress. Things will grow, change, and evolve — these shifts are signs of progress. If you plan for evolution, it’s easier to adapt as the landscape changes.

3. Develop a Recruitment Strategy

Recruitment is one of the most critical aspects of an HR plan. Startups often compete with established companies for talent, so your approach needs to stand out.

Employer branding is crucial for startups, as it’s their strongest recruiting tool. Showcase your company culture, mission, and benefits to attract top talent. Ultimately, your employer branding should resonate with the kinds of people you want to carry your startup into the future.

Startups working with limited resources may need to take a unique approach to remain competitive. For example, you can offer special perks that appeal to startup-minded individuals, such as flexible work schedules, equity options, or accelerated career growth.

Finally, streamline your hiring process to give yourself an edge. Create an efficient interview and selection process to avoid losing top talent to competitors.

4. Create an Onboarding Process

A structured onboarding process helps new hires acclimate to your startup’s culture and hit the ground running.

A great onboarding process generally includes four key elements:

Introduce new hires to the team, company values, and key policies.
Provide role-specific training to set employees up for success.
Pair new hires with experienced team members for guidance.
Plan for regular check-ins to ensure employees feel supported and valued.

Your onboarding strategy will likely be much easier at the beginning when your workforce is smaller. Consider the scalability of your strategy and how it will adapt to your organization’s growth.

It’s best to place a strong emphasis on check-ins and providing support to new employees. Additionally, never undervalue the importance of communication and recognition during the early stages of any organization.

5. Develop Compensation and Benefits Packages

Competitive compensation and benefits are essential for attracting and retaining talent, especially in a startup environment.

Research industry standards to offer competitive pay if possible. It may not be feasible to do so right out of the gate, and if that’s the case, consider equity options as an alternative. Many startups offer stock options to align employee interests with company success.

Additionally, consider health insurance, retirement plans, and wellness programs. You’ll need to satisfy state and federal minimum requirements for retirement plans and health insurance, but wellness programs can be more open-ended. For example, if you’re able to score discounted rates on massage therapy or gym memberships, your employees will likely appreciate it.

Non-monetary perks are also a great bargaining chip. Flexible schedules, remote work options, and professional development opportunities can be extremely attractive.

6. Establish Clear Policies and Procedures

Clear policies ensure consistency and help your startup comply with state and federal labor laws.

Your employee handbook can be as detailed as you need it to be, and it should contain several core policies designed to protect both you as the employer and your employees’ rights:

Code of conduct
Attendance and leave policies
Anti-discrimination and harassment policies
Grievance procedures

Employee Handbooks by Mosey contain all the tools you need to roll out a multi-state employee handbook in minutes. Automating your handbook can assure compliance while saving you a tremendous amount of time and energy, which your HR team can direct to other areas of your startup.

7. Build a Performance Management System

A performance management system helps align individual goals with company objectives and fosters employee growth. It’s important to keep track of your mission from the very beginning — after all, if everyone is mission-driven, you’re more likely to stay aligned as your business grows.

Many startups find using SMART (Specific, Measurable, Achievable, Relevant, and Time-Bound) goals helpful. Conduct one-on-one meetings and provide constructive feedback to employees as they work towards their SMART goals. If someone needs extra support or guidance, it’s easy to reaffirm or redirect when you have frequent meetings.

High-performing employees should be rewarded with opportunities for advancement, but these opportunities may come at unpredictable times at startups. That’s why it’s so important to celebrate victories and offer recognition when SMART goals are met. Let your workforce know you’re paying attention!

8. Create a Compliance Strategy

Compliance challenges can be major obstacles for brand-new startups. Non-compliance penalties can be financially devastating, and compliance itself can be difficult to track. Additionally, while federal compliance requirements are the same for everyone, state compliance requirements can be heavily nuanced.

Mosey’s compliance management platform helps businesses of all sizes keep track of relevant state and local compliance requirements. We can help your startup automate compliance and grow with your business as it expands.

Let Mosey Help Your HR Team

Your HR plan is a living document that should grow and adapt to your startup. By attracting top talent, fostering a positive culture, and staying compliant, you’ll build a team that drives your company’s vision forward.

Setting a strong foundation gives your startup a platform on which to grow. As your company evolves, your HR plan should evolve to match it. Ultimately, an HR plan should support your workforce and your mission at the same time.

Schedule a demo with Mosey to learn how our automation platforms can help you develop an HR plan and optimize your compliance strategy.

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