Why Your Startup Needs HR Support

Eric Mochnacz
June 30, 2022

As a startup founder, you are focused on growing your business.  In our experience working with startups, the business owner often takes on more responsibility to save money and operate lean.  They have the knowledge, skills, and experience to launch the startup and cultivate its growth, but may not have the practical HR experience needed to grow the workforce, implement policies, ensure compliance, and drive change in a scalable and sustainable way.  That’s why your startup needs fractional, outsourced HR Support; they can manage your HR functions and HR strategy, and you can focus on running and building your business.

What is HR Support?

For a startup, once you make your first hire, HR Support becomes an essential part of your business plan.  How you recruit, hire, onboard and treat your new employee is the framework for the future of your organization and all future hires.  Every decision you make as a startup founder will impact your employees, whether it’s one person or you’ve grown to a team of 5 or 10. It’s essential for your startup to work with a skilled HR practitioner to manage HR functions and build your HR department.  You may not need full-time HR, so working with a consulting firm who can offer flexible HR support on a fractional basis, like Red Clover, is an ideal solution for your startup.

Why Proper HR Support is Essential for Startups

As you look to grow your startup, you want a strong foundation for success in all business practices.  This includes how you manage and build your HR function.  Working closely with skilled HR support, they work hand in hand with you to develop and implement HR processes and procedures that work with one employee but are scalable and sustainable to work with ten, twenty five or fifty employees and beyond.  

At the startup stage, you’re attempting to make money and seek funding, but you also are looking to find the right people for your organization.  You want top talent who are experts in their fields, so you have the best minds fueling company growth while also serving as representatives of your business.  How employees and candidates in your talent pipeline speak about your company is everything to a startup, and having a solid industry reputation is how you attract and retain talent.  The right HR support helps you develop your core values and company culture from jump, which influences your employer brand – or how external people view your business.  The right HR resource helps you build out key people processes that support your culture, values, and brand so that you start out strong and can maintain momentum through business growth. 

Outsourced vs. In-House HR Support

When we work with startups, the discussion we often have with organization leadership is the benefit of working with the team at Red Clover as opposed to going to market to hire an internal resource.  Generally speaking, we find startups don’t need full-time HR.  It can be hard for a startup to meet the salary requirements of an HR professional on the market, especially since HR industry salary expectations seem to be overinflated compared to individuals’ actual abilities.  You need someone who recognizes the unique needs of building a startup and its HR function from scratch.  They need to be willing to roll their sleeves up and contribute strategic insight to the forward motion of the business – and sometimes you don’t get that from a seasoned, corporate HR professional.  Simply put, you need good HR.

We can do the work of a full-time HR professional starting at one day a week or become your outsourced, interim HR manager for three days a week or more.  We are able to do it at a cost savings, especially since you aren’t on the hook for payroll tax or benefits cost for our consultants.  An HR consulting firm like ours offers flexibility in that we can manage the ebb and flows of the business cycle, swapping out consultants based on their areas of expertise, and increasing and decreasing our levels of service as we evaluate your needs, quarter by quarter.  We can do the work of a full-time HR resource in three days – and that’s managing every aspect of your employee lifecycle – recruiting, offboarding, and everything in between.

We can do the work of a full-time HR professional starting at one day a week or become your outsourced, interim HR manager for three days a week or more.  We are able to do it at a cost savings, especially since you aren’t on the hook for payroll tax or benefits cost for our consultants.  An HR consulting firm like ours offers flexibility in that we can manage the ebb and flows of the business cycle, swapping out consultants based on their areas of expertise, and increasing and decreasing our levels of service as we evaluate your needs, quarter by quarter.  We can do the work of a full-time HR resource in three days – and that’s managing every aspect of your employee lifecycle – recruiting, offboarding, and everything in between.

Working with outsourced HR support helps you bring a unique, external perspective into the strategic growth of your startup.  Your internal resources bring valuable insight into your business decisions, but those decisions directly impact them, so it’s harder for them to be impartial.  External HR’s only “skin in the game” is the success of your business, so their honest counsel is provided with the singular goal of driving your business forward.

Is Your Startup In Need of an Experienced HR Consultant?

Having a skilled, knowledgeable HR professional on your startup team is critical to startup success.  You want to successfully vet and choose the right person (or team of people) to offer strategic HR support to drive innovation, and more and more, it benefits you as the owner to work with an external consulting partner.  Red Clover has direct experience with helping startups across a variety of industries scale, grow their workforce, and establish a strong foundation for growth – all while remaining focused on your people. 

If you’re a startup founder, and you’re not sure of the next steps you need to take to establish your HR department, we would love to hear from you.  Reach out to schedule a call. 

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