How To Develop HR Policies For Startups

Since startups are mostly fast-paced workplaces focusing on product, service, and customer development, it's only natural to find that these early-stage companies would spend little time on their employment documentation and HR policies.

However, there will come a time in the life cycle of every company when the importance of a more solid HR approach becomes clear - mostly when something goes wrong.

Whether you like it or not, your startup needs a formal set of HR policies before you start making your first hire. When creating HR policies from scratch, you'll need to understand your company's legal obligations, your employees' expectations, and how these policies will affect your bottom line.

Whether you're the employer or HR leader at the startup, below is everything you need to know about developing some important HR policies for your current and future workers.

But first, why should a small business or startup have HR policies?

Company culture is an essential element of growing your company. Well-thought HR policies can lead that culture-building process, mainly if leadership develops policies and difficult-and-quick rules over guidelines.

Developing, implementing, and managing HR policies can help startups become more skilled at attracting and retaining talent. Having a clear plan for onboarding, salary structure, career pathways, and termination will help set consistency and expectations throughout the company.

5 steps in creating HR policies for small businesses or startups

From development to implementation, here are 5 steps employers or HR professionals should follow:

#1 Create a formal organizational structure

Before recruiting new employees, employers should create a formal organizational HR structure hinging on an individual (or team) employees can talk to regarding their work problems. This will serve as the guide for your HR department as the company grows, so make sure you select an HR team that incorporates the company's culture.

#2 Determine your company's hiring and onboarding process

An HR policy that a company must have is the basic hiring and onboarding processes.

For example, the hiring policy should specify how to outline job descriptions, the types of hiring platforms or networks used to advertise for the role, and how to create a recruitment pipeline with company-invested tools.

Once you've successfully recruited a new candidate, your onboarding policies are what comes after. It should have consistent information regarding how to write and send out employment contracts, the methods you'll be adopting to onboard the new hires, the legal documents you'll need from the new hire, and the culture-setting experience you'll do on their first weeks (this may include a welcome lunch, office tour, or other benefits you would like to offer). 

#3 Decide the salary and benefits for each position

This is by far the most essential and must-have HR policy in every workplace. This policy impacts all aspects of the business - from accounting to HR - and should be well-crafted with the best interests and provisions for the future.

Pay and benefits will vary by role, depending on the size of your company and the industry you're in. Nevertheless, every company should have a formal pay structure and federally mandated benefits like employee compensation or family medical leave.

In addition, the benefits policies should consist of expectations and regulations for any voluntary benefits you would like to offer, including (but not limited to) PTO, home office allowances, parental leaves, health and well-being benefits, and health insurance.

#4 Develop employee retention programs

A policy that most companies often overlook is employee retention. This underrated policy should be included as it helps maintain a positive relationship with workers once onboarded in the company. Examples of this policy include setting career pathways, professional development training, leadership and mentoring, and culture-building activities.

During the Great Resignation that has affected the global workforce, we have firsthand seen the fact that workers give their loyalty to companies that demonstrate that they value their workers as humans by financing their career growth, being attentive to their needs outside of the company, and providing both personal and professional support.

If unsure where to start with this policy, consider asking for employee feedback through surveys or one-on-one sessions. 

#5 Start preparing for audits

Audits are regular parts of the company, and to make preparations for them. You'll have to ensure your company's hiring and onboarding policies, salary and benefits, and others are in compliance with federal and state regulations. Necessary paperwork that may come in handy for an audit includes staff files, organizational structure, performance evaluations, and any safety regulations and plans you have set for the business.

Conclusion

Pay attention to the impact of HR policies. When outlined with the business's goals in mind, along with legal assistance from employment and labour lawyers, well-drafted HR policies can give your company a successful start in the long run.

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