Top 6 HR Challenges and Solutions for Startups

While ignoring HR problems can be costly, statistics show only half of companies (49%) actively invest in improving their human resources management. Here’s a quick roundup of 6 top HR challenges your startup could face—and the rewards you can reap from resolving them early.

1. The need to establish certain workplace policies.

In Ontario, for example, required HR policies involve health and safety, violence and harassment, accessibility, and pay equity plans. Non-compliance could result in hefty fines and put your startup at grounds for discrimination.

Solution: Work with an employment lawyer to prepare clear documentation.

In addition to what’s required, many startups streamline workplace management by creating policies around everything from social media to time off. Solidifying HR policies from the get-go—and committing to regular updates—will ensure you set well-defined employee expectations.

2. Lack of proper HR technology.

With so many ways to work, HR logistical challenges involving tax forms, time zones, and labour laws have increased. Meanwhile, 36% of human resources professionals blame insufficient technology for their inability to automate and organize key duties like onboarding.

Solution: Use dedicated HR software to supercharge efficiency and insights.

The larger or more widespread your workforce, the more likely you are to benefit from dedicated HR technologies. Using HRIS (human resources information system)/Payroll software, for example, will standardize and automate many common HR tasks.

3. Support for employee well-being.

According to Deloitte, only 56% of employees think their company’s leaders care about their well-being—versus the 91% of leaders who believe their employees feel they care about them. Moreover, deciding which benefits your new business can afford to offer is often challenging.

Solution: Get creative about prioritizing employee wellness.

Even with a limited budget, you can create an attractive benefits package that shows you care about the staff you bring on. You might, for example, set up a pool of funds to give every employee a health spending account or offer more time off than your competitors.

4. Competition for the best employees.

With 86% of job-seekers researching company reviews and ratings before applying for a job, new businesses are at a disadvantage. Worse, only one-third of candidates believe job descriptions are clear—while 92% will stop filling out job applications that are too complicated.

Solution: Clarify and simplify your hiring requirements.

Some HR experts believe a well-written job description goes a long way to attracting top talent. You might also consider emphasizing pay transparency, seeking transferrable knowledge, and hiring less experienced team members who have the drive and soft skills to learn what’s required.

5. Providing an effective onboarding program.

While taking employees through your startup’s processes and HR policies is important to cement their success, sharing too much information, too quickly, can overwhelm new hires and undermine their productivity.

Solution: Find a balance between what’s essential to know and what can wait until employees settle into their roles.

Great employee onboarding can improve employee retention by 82%. One way to create an efficient onboarding process is by using SMART goals to define and set your objectives, measure the outcomes, and determine the best time management practices to follow.

6. Retaining new employees

According to Jobvite, almost one-third (30%) of new employees leave their jobs within the first 90 days. While addressing employee concerns can be a challenge for any HR department, it’s especially difficult for startups just getting established.

Solution: Be proactive about following up and gathering feedback.

Dedicated one-to-one meetings are an especially valuable way to address employee questions, confusion, and concerns, and determine which tasks or procedures need improvement.

With research suggesting that 70% of employees depend on businesses to provide a sense of purpose, working to overcome common HR challenges like these is a great way to show employees they matter.

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